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Proletarian issue 5 (April 2005)
Industry matters: Labour attack public sector pension schemes
This February, thousands of public sector workers staged protests and demonstrations across the country in opposition to government plans to alter their pension schemes. The changes have been proposed by the Office of the Deputy Prime Minister (ODPM) and include: raising the retirement age from 50 to 55 and scrapping the 85 year rule, which allows workers to retire on a full pension if their service and age combined add up to 85 years.

The proposed changes in some cases would halve a worker's pension. For example, a worker with 30 years service aged 55 with a final salary of £15,580 might currently get £7,478 a year in pension. Under the proposed changes, such a worker would get £3,379.

Although local government workers are the first to be affected, they are not the only ones the reform is aimed at. Other public sector workers, including health workers, teachers, fire fighters and civil servants, are next in line. The latter are also under attack on another front by the government, who want to shed up to 100,000 jobs. The trade unions involved are balloting members to resist the changes, and a day of action was proposed for 23 March 2005. However, timid though this response was, the 'day of action' was gratefully called off by the various public sector unions when the government agreed it would not be raising the civil service retirement age from 60 to 65, and agreed to set up a negotiating forum for the Local Government Pension Scheme with "nothing ruled in or out"! Not a settlement then, merely a postponement of the issue until after the General Election expected in May.

Be that as it may, it is now apparent to all those who do not wilfully keep their eyes closed shut that Labour are reneging on the so-called 'Warwick Agreement' (WA). The WA was cooked up in the summer of 2004 with a view to persuading unions to maintain their support for Labour at the next general election in exchange for some employment reforms. One of the stipulations of this document was an agreement to engage in effective dialogue over the future of public sector pensions.

Also contained in the WA is reference to TUPE-style transfers (Transfer of Undertakings to Protect Employment) to protect pensions when companies merge or transfer workers. What it doesn't mention is: who becomes accountable if the pension scheme is held or administered by the government? This may be an issue for the thousands of local authority workers who have been, or will soon be, transferred to the private sector.

What is the likelihood of public sector workers keeping at least their present pension entitlements, given their unions' relationship with Labour and given that thousands of workers, although they may have a public sector pension, no longer work in the public sector owing to outsourcing and privatisation programmes that have been brought in by Labour and overseen by the unions? A further evil omen is that both the unions and government maintain that the current scheme, in which there is currently an estimated £400m shortfall, is unsustainable because of pension holidays taken by local authorities when the stock market was booming. Although workers all had to continue paying their contributions throughout, it is they and not the local authorities who are required to suffer the consequences of the shortfalls that arose when, inevitably, the stock market eventually fell. It may well have been under the Tories that the pension holidays were taken, but it is under Labour that the loss is being pushed on to the workers.

Every day it becomes clearer that, if they are to wage any kind of effective struggle for the defence of their terms and conditions, trade unionists must break the link with Labour. This link acts to render the unions totally impotent in the daily struggle between the proletariat and bourgeoisie around wages and conditions. A break with Labour is the first essential step for the British labour movement. Without this break, not only will it remain impotent in the struggle under capitalism, but it will never develop the unity, experience and understanding necessary to develop into a struggle against capitalism - a struggle not for "the conservative motto, 'A fair day's wage for a fair day's work'", but for "the revolutionary watchword, 'Abolition of the wages system'". (Marx, Wages, Prices, and Profit)

Our party sets out the following immediate demands in relation to pensions:

(i)    The state should make good the wages of people who are unable to work full time or at all, including the elderly, up to at least the average wage.

(ii)    People should be entitled to reduce their working hours (with any loss being made up by the state) from age 40, until at 60 they become entitled to retire completely - but no compulsory retirement by reason of age.

(iii)    The NHS and other social services should be funded at a level that will enable them to provide a free service to everybody, including the elderly.

(iv)    The state should provide free temporary and permanent places in residential homes for all those who need them. These homes should to be transformed from under-funded dumps to welcoming havens of comfort and tranquillity.

Britain is the fourth wealthiest country in the world - of course the ruling class can afford it. How can a society call itself civilised when it treats its elderly and retired in such an uncivilised way? Let us together fight for a better and just communist society.
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