ttle over
Pensions government funds some 75 per cent of local government spending, the remaining 25 per cent is raised locally mainly via the Council Tax and local charges of various kinds, for ex- ample paying to use council facilities. It is es- timated that every 1 per cent increase in spend- ing not funded by central government entails a 4 per cent increase in council charge. However the government may be deliberately exaggerating this sense of crisis, part of its strat- egy to shift the burden from collective provi- sion and benefits to personal insurance and con- tributions, as they have with tuition fees, private health care and now pension top-up schemes. The government's own figures estimate that pensions are now 5 per cent of GDP and will rise to 5.9per cent in 2050 - hardly a crisis. The local authority employers' position is that they want to see a Defined Benefit scheme, which would mean a limit placed on the pen- sion that could be expected whatever the con- tribution made. Currently there exists a De- fined Contribution scheme that is open-ended - your final pension depends on how much you and the employer have contributed. A Defined Benefit scheme would mean you have to work longer to get the same level of benefits. Public to Private The attack on public sector pensions is not only about the perceived cost, it is also about ensuring that it is easier to privatise public services. During the early 1990s the use of TUPE, which protects workers' existing pay and conditions in a firm subject to take over, was used to good effect to derail some of the Tories privatisation plans. But the Government has now announced an end to the so called two tier workforce, where some workers in privatised concerns are pro- tected by TUPE and new employees are on different pay and conditions. By bringing the public sector into line with the private sector these 'problems' associated with staff transfers would be considerably lessened. The replace- ment of final salary schemes in the public sec- tor, with average salary schemes, will reduce the cost to the private sector of taking on the responsibility of former public employees. With this government's ambitious privatisa- tion programme and many services previously delivered by local authorities quietly being transferred to the voluntary and community sector, this is an important neo-liberal mod- ernisation'. Retirement Age The debate on pensions also raises the question of the retirement age. Many in the public sec- tor do not work their whole working lives for the same organisation and will not qualify for the full pension entitlement. When the retire- ment age was raised to 60 in some government departments, this caused great hardship. Even with a retirement age of 65 many public sector workers still face pensioner poverty - but why should they have to work longer just to get a living pension? Longer life expectancy depends on your job and class. From 1972 to 1999, the life expect- ancy at 65 of a male caretaker increased only 1.5 years. For a female hospital cleaner it did not increase at all. If the government's propos- als go through and the pension age rises to 65, many working people will be faced with a dif- ficult choice. Option one is to go on until they get their full pension at 65 -but then have only a few years funded retirement (or risk dying while still at work). Option two is to have a longer retirement, but spend it in poverty on a pension that is 30 per cent less than they would get at 65. And even then, because there is a link between poverty and early death, they might not live as long as they would think. But life expectancy can also suddenly drop in a changing society. The ravages of the re-intro- duction of capitalism in the former USSR have brought deep poverty to millions of pensioners and the average life expectancy is now 5 years less than it was before the wall came down, just 15 years ago. Trade unions now need to defend decent pen- sions in the private and public sectors from another New Labour attack which will widen the gulf between the rich and the poor. Just compare the basic state pension of €79.60 with the f40 or so million creamed off by the MG Rover bosses and the £250,000 pension they gave themselves. Not to mention the pen- sions of judges based on half of their £133,121 to £205.242 salary, or MPs who will get two- thirds of their salary after only 27 years. Strikes to Defend Pensions Restoring the link of the basic pension with earnings, long the demand of the pensioners' movement, is just a start. British pensions are now among the lowest in Europe. While there have been many strikes and demonstra- tions in Italy, France and elsewhere in de- fence of pension rights, the British workers' movement has been, up to now, very slow to defend existing pension rights, let alone de- mand anything better. The recent threatened strike, involving an unprecedented alliance of seven public sector unions, was organised eventually because of the pressure from the membership. If the government withdrew the changes, it was only because of the threat of a massive strike involving over 2 million work- ers that would have caused a political prob- lem during the election campaign. However the New Labour government has made it clear that, if elected it will be resub- mitting the changes to the public sector pen- sion schemes, although this time with proper consultation - something that the not-so awk- ward squad has welcomed. Public sector trade unionists need to be ready for what could become the first major con- frontation very soon in the life of the new parliament. The left needs to stoke up the pressure by arguing that we can go straight to strike ballots without time-wasting consulta- tive ballots, that there should be no conces- sions on key issues such as retirement at 60 without loss of benefits and a pension based on final salary, and that if industrial action is necessary it should involve as many public sector unions as possible. 3