Attacks on pensions: Unions are part of the problem

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After the election of New Labour in 1997, the first major act of the British state, via the Labour Government and specifically through Gordon Brown’s Treasury, was to ‘lift’ five billion pounds from workers’ pension funds. Not just for one year, but year on year ever since. Given the rate of inflation, this amounts to a substantial part of the current pension fund deficit, estimated to be between sixty-five and over one hundred billion pounds.

That capitalism robs the workers, that capital cheats labour, is of course no great surprise. The very system of capitalism is based on the theft, robbery and exploitation of the working class. Capitalism can never give back to the producing class the value of its labour power and is driven to constantly attack and reduce its wages and conditions, particularly now as the economic crisis becomes more acute. The attack on pensions and retirement ages also robs us of our dignity, inasmuch as the small hope of workers retiring with a modicum of comfort and self-respect is being dashed. To add insult to injury, the state tells us that we are ‘living too long’, its whole campaign piling on more grief, pressure and worry about the future for the whole of the working class. The Government talks the language of  ‘brutal honesty’ while lying to us through its back teeth. With cuts in the health service and care, with wage cuts and freezes and ‘flexibility’, with rising unemployment, the attack over pensions is part of a death by a thousand cuts.

But it isn’t just the Government that is carrying out this attack on pensions; the trade unions, as institutions of the British state, are facilitating the attack by fragmenting responses to it from angry workers, by dividing up different sectors and by directly proposing, agreeing to and implementing cuts in pensions and increases in the retirement age. They have done nothing to stop the gradual but real decline in state pensions over decades; and they’ve also done nothing to stop the increase in the retirement age of women by five years to sixty-five: ‘equal rights’ = equal pauperisation. What a victory that was for the feminists and their leftist supporters; what a victory for the trade union’s equal pay campaign: equal suffering.

Many companies have moved from defined benefit final salary schemes (already paid for out of workers’ wages) to inferior defined contribution schemes [1], many of these with union agreement and passed by union officials on pension boards. This has resulted in workers doing identical jobs, side by side, on different wages and conditions. At the end of last year Rentokil announced the end of its final salary scheme for all workers, and other companies will follow. Arcadia, the Co-op and BA, amongst others, have announced massive changes in their workers’ pension arrangements, involving working more years, higher worker contributions and lower benefits – in many cases, all three. The state is orchestrating this attack with its various reports (Turner for example, calling for the retirement age to be raised to 68) and the appointment of a Pension Regulator in overall control of the direction of the attack.

Unions play their role for capitalism

As the crisis of capitalism is world-wide, so workers’ pensions and conditions everywhere are under attack: France has seen massive demonstrations against pension ‘reform’ (carved up by the French unions); Canada, the Netherlands, Austria, Switzerland and Germany all have pension funds with massive deficits that will require extra years work, extra contributions and pension cuts from the workers. Japan’s pension funds have less than half the funds they need [2]. In the USA recently, Verizon, Lockheed-Martin and Motorola have all ended their final salary schemes. Most significantly, at the beginning of January, IBM, the model ‘good employer’ of US capital, ended its final salary scheme, prompting a respected New York Times journalist to call it “the end of the American Dream” (New York Times, 6.1.6 – see also the article in this issue on the NY transit strike).

In Britain, as everywhere, the unions never talk about the working class. It’s this sector, or that sector, or sectors within sectors, everything to reinforce divisions within the working class as a whole. Some present the state sector as better, as ‘protectors’ of the workers. As if the state hadn’t been making massive redundancies and cuts in wages. And it is the state itself that is leading the attack on the retirement age and pensions of all workers, private or public, whatever branch of industry or service.

Brendan Barber, TUC General Secretary, said on 5.1.6, “Unions have a proud record defending and extending pension rights” when the opposite is clearly the case (Barber went on to say that this applied to “those (companies) that can afford to fund deficits”). In order to make out that they are fighting pension cuts, the unions talk about ‘going to court’, about wanting ‘consultation’ and threatening to ballot for pointless, isolated one day strikes. This is their idea of the ‘defence of pensions’. In the Co-op, the GMB and T&G unions carve the workers up with their individual, pointless threats, while Amicus accepts the new, inferior pension scheme. Their leader, Simpson, says, “We’re disappointed… in lesser pensions… Nevertheless, the Company are at least retaining a pension scheme”, so this union is “recommending” it.

With friends like these…

In the public sector, the Unison website boasts about how, in relation to pensions, it is “saving taxpayer’s money” with its low pensions payments to local government workers. These average £3,800 per annum and given higher grade pensions at the top end of the scale, means that many workers are getting a lot less than thirty-eight hundred a year. Again the website boasts about how “manual workers die before the actuaries expect them to” again “saving the taxpayer money”  [3].  The Health, Civil Service and Education agreement between Government and unions over pensions last year, to be implemented this June, was called “a major breakthrough” by Barber. It is. A major breakthrough in the attack on the working class with a two-tier wage structure, different benefits for the same workers, increased contributions “encouraged” and increased “flexibility”.  The PCS union says that there are some details “to be hammered out”. The only hammering being done is by the unions on the heads of workers.

This is what the unions do – they fulfil a vital role for the capitalist state in not only facilitating and implementing attacks, but, despite all their talk about unity and solidarity, divide up any possible response to them.

The working class will have no choice but to fight. The future of capitalism is looking bleaker and bleaker for the working class as the state no longer attempts to offer us ‘a better tomorrow’. Indeed, for the working class, ‘tomorrow’ itself is increasingly called into question by the crisis and decay of the system. The threat is increasing there for all workers to see. It is the job of the unions and their leftist supporters to blind and divert us away from the necessity of collective action.
Ed 16/1/06.



[1] Defined Contributions rely much more on share performance. Given that the relative rise in Stock Market over the recent period has done nothing to attenuate the deficits of Defined Benefit schemes, the middle and longer term tendency for the Stock Market to fall can only spell more worry and misery for workers in Defined Contribution schemes.

[2] See World Revolution no. 279, November 2004: ‘Stealing humanity’s future’.

[3] A recent Health Service study in Glasgow, confirming many previous studies elsewhere and nationally, show the difference in male mortality rate, from wealthier to poorer parts of the city, to be over 20 years and widening.