Pensions report:

Fight Back Against A Future Of Poverty

THE NEW government report on pensions could be political dynamite. It shows that British capitalism can only offer future old age pensioners deep poverty after retirement.

Roger Shrives

The government think we're all living too long, retiring too early and not saving nearly enough. There's a £57 billion 'gap' in pension provision, that's nearly £1,000 for every man, woman and child in Britain.

The report talks of plugging that gap with a mixture of higher taxes, working longer years, (the bosses already hint we should be working longer hours each week), accepting lower living standards after retirement - or compulsory savings.

Who's written the report? That's Adair Turner. He's vice-chair of Merrill Lynch Europe, one of the world's top finance companies, former director-general of the bosses' CBI and chair of both the Low Pay Commission and the Pensions Commission.

This fat-cat 'expert' on low pay and pensions won't want to rock the boat with his fellow-employers. Or come to that with a government which spends just 5% of Britain's GDP on pensions compared to 11% on average in the European Union. He's looking at capitalist 'solutions'.

Turner says over 12 million people in Britain don't save enough for retirement. At present, the average pension pot at retirement is £30,000, which would get you a pension of £30 a week. Many people don't even get that and have no pension pot, despite years of paying taxes and National Insurance.

The last few years have also been tough for most private pension holders. Turner's successor at the CBI, Digby Jones, claimed that employers' contributions to private pensions funds had doubled in recent years. Maybe. But when the stock markets were booming and company pension funds were worth more than the amount firms thought they'd have to pay out, top firms took a 'holiday' from contributions.

Between 2000 and 2003 however share prices nearly halved. Companies had to start paying money into their pension funds again but many of them also closed their pension schemes based on a worker's final earnings and replaced them with far worse-paying schemes. That shows the dangers of solutions based on capitalist profitability.

Capitalism wants us to pay for our own retirement. Blair says no action will be taken until after the general election. But already he's said that no more money is going to the poverty-pay state pension and that any pensions 'reforms' will be paid for by cuts in other benefits such as incapacity benefit.

This crisis is an indictment of the capitalist system. Many trade unions have threatened strike action over threats to pension levels or to the right to early retirement. This new report should spur union activists to rekindle these plans and start a campaign for a decent retirement.