Pensions ‘crisis’ – working class will pay the price

What we think

Pensions ‘crisis’ – working class will pay the price

TONY BLAIR, we were told last week, wants to see major reform of
Britain’s decrepit pensions’ system as his ‘legacy’. Given the state of
some of his previously desired ‘legacies’ – Iraq, the NHS, education,
reform of public services to name a few – then the majority of people
preparing to claim their pension from 2015 onwards will fear the worst.

Last week’s news that Tony Blair and Gordon Brown had come to a ‘deal’
on pensions – sounding like an agreement between two warring countries
(not far from the truth) – will provoke indignation amongst millions.

Here are two men who will have a guaranteed pension pot of millions
deciding how best to dole out in future the miniscule state spending
allocated to pensions. Britain spends far less on pension provision than
other EU countries.

This was not a debate about how to use the wealth of obscene profits
of the big multinationals like Tesco and BP to improve the lot of the
vast majority of pensioners in Britain living below the official poverty
line. Nearly three million pensioners now claim pension credit.

Instead it was a discussion on how best to avoid a future social
revolt against the increasing use of means testing for pensioners,
something increasingly encroaching on the middle-class voters Labour
believes it wins elections through.

The Blair and Brown argument about the implementation of the Turner
Report on pensions was about how to save a future Brown government money
and was a dispute over relatively small sums of money. There is no plan
to increase the real amount of Gross Domestic Product spent on pensions
over the decades ahead.

It means that the real pensions crisis that already exists for
millions of working-class pensioners will not be addressed.

At present, this crisis means four out of ten pensioners live on less
than £10,000 a year. More than 1.6 million pensioners have returned to
work to supplement their meagre pensions. Millions of pensioners cut back
on the essentials of heating and electricity just to live. A report in
November 2005 revealed that over two million women are not entitled to a
state pension nor do they have minimum entitlements.

Union response

THE BLAIR/Brown ‘consensus’ over implementing the Turner report has
produced agreement that it will be the working class who pay the cost of
pension reform.

To pay for claimed relatively minor ‘improvements’, working-class
people will have to work up to three years longer (possibly more); see
the restoration of the state pension’s link to earnings occur five years
later than Turner suggests and the increase from 2020 of the retirement
age for women to 65.

The tax breaks and state subsidies that go to those high earners with
gold-plated pension plans are likely to continue. And the government
seems set to give subsidies to employers who say they cannot afford the
pension contributions they are supposed to make under Turner’s proposed

The TUC and some of its affiliated unions have initially welcomed the
Turner report, whilst making minor criticisms about the increase in
retirement age. However, there are signs from a number of unions that
they could correctly reject the Turner Report’s recommendations.

The GMB has announced it will oppose an increase in the state
retirement age and at the CWU conference this coming week a number of
motions rejecting the Turner Report are on the agenda.

At the same time the scheme negotiations for new entrants in the
public sector are coming to a conclusion. But, the Tory Party has
promised to rip up these agreements if elected at the next general
election. This is a warning to all workers that attacks on their pensions
– state and occupational – will be ever present under Labour or Tory

Last year’s united stand forced the government to back down in raising
the retirement age for millions of public-sector workers.

That unity in action needs to be developed into a struggle on pensions
generally, including the TUC calling a national demonstration opposing
the raising of the state retirement age, and building a mass movement
that solves the ‘pension crisis’ to the lasting benefit of the millions
of working-class people now facing a poverty-stricken old age.