Link to this page: https://www.socialistparty.org.uk/issue/410/4665
New attack on council workers' pensions
IT'S CLEAR that the truce over pensions between local government workers and New Labour is now over. On 22 September the local government employers, who are dominated by the Tories, backed by deputy prime minister Prescott's office, announced a new package of attacks on millions of council workers' pension schemes.
Glenn Kelly, UNISON national executive, personal capacity
The new proposals would mean ending the right to retire at 60 without losing up to 1/3 of your pension. There will be no protection arrangements for any worker.
Under the previous proposals, this aspect would only take effect after 2013. So anyone who is over 51 now was protected. Now the government want to introduce this cut in 2006.
The right to access your pension at 50, if you're made redundant, will be increased to 55. And in return for this we'll be expected to increase the amount we pay from 6% to 7% of our salary.
Incredibly, the employers say they're doing us a favour because we will be able to make up any losses ourselves, by paying even more. Prescott's office and the local government employers, have said that they want the deal done by October. If they don't get agreement from the unions they will attempt to impose it from 1 April next year.
These proposals are worse than the proposals which were on the table last March. It's quite clear now that the trade unions are going to have to begin preparing for industrial action across the public sector.
The next round of talks are on 8 October. If the government refuses to back down from these proposals, we should immediately make plans for an industrial action ballot. UNISON's national leadership are already talking about the necessity of strike action to defend ourselves against these attacks.
Socialist Party members on UNISON's national executive are moving a resolution demanding that the TUC names the date for the all-public sector demonstration on pensions. This should take place as soon as practically possible.
It may well be that the employers' and government's current proposals are a negotiating position, in the hope that if they water them down a little we will accept some weakening of our pensions. The union's position is quite clear, expressed by the activists at conference, that we don't want any attacks on our pensions at all. And the membership have already shown their willingness to defend the pension scheme by voting for strike action last March.
We cannot allow anyone, be it the government or union officials, to try to soften us up to accept a reduction on the spurious arguments that we're living too long and the scheme can't be afforded.
On 1 April next year when these pension attacks are due to be introduced, the government will be about to hand over a £4 billion tax-free incentive to the rich for their pension schemes. If there's money to hand to the rich, there's money to pay for our pensions.
WHILST LABOUR ministers lectured public sector workers about the need for an affordable pension scheme at the TUC Congress, they were preparing to give away a £4 billion a year in a pension bonanza to the rich!
On 6 April next year the government is to introduce new regulations called SIPPS (self-invested personal pensions). These regulations are supposed to be about "simplifying" pension savings rules.
What they really mean is the rich can switch their money into SIPPS and be able to buy holiday homes, homes to let etc without having to pay tax.
They will also be able to avoid paying income tax on the rental income and avoid capital gains tax when they come to sell the property. It is estimated that the government will lose £4 billion a year in lost taxes.
Even a pension advisor to Downing Street admitted that: "These reforms would allow the wealthy to make hay with their pension savings". The rich are already lining up to get their noses in the trough and have invested £1 billion in SIPPS in the last nine months - six months before the new regulations even come into place.
The government are prepared to hand over £4 billion a year of taxpayers' money to support the rich but have only offered just £20 million a year to those workers in the private sector who had lost their pensions after their companies shut down their pension schemes. The government's pitiful compensation scheme will mean as little as £10 a week for many of these workers.
There is no talk of 'living too long' and 'affordability' when it comes to protecting the rich. The trade union leaders must now be kept to their words and lead the fight to defend every penny of our pensions.
In The Socialist 6 October 2005: