A full life for the elderly
Eddie Ford looks at the long awaited Pensions Commission report and puts forward the communist programme: for retirement at 60, for the tripling of pensions
This week saw the publication of the long awaited Pensions Commission report. Under the aegis of ex-Confederation of British Industry boss Lord Adair Turner, the commission has spent the last three years devising ways to 'modernise' the UK's pension system - and last October it published an interim report which totalled more than 300 pages. Now, at long last, we have the full version . The main proposals of the new Turner report involve gradually increasing the age of retirement from 65 to 68 by 2050, phasing out means-testing of the current state pension and replacing it with a flat-rate payment, based on residency rather than national insurance contributions. The report suggested the rate would be "more generous". Furthermore, Turner suggests, the introduction of a new national savings scheme ('Britsaver'), into which those workers who decide not to opt out will pay 4% of their earnings - with their employers coughing up 3% and the government a generous 1% (through tax relief or credit). Additionally, the commission has called for the basic state pension to be indexed to earnings rather than price inflation, as currently constituted. Unsurprisingly, some bosses are not exactly enamoured with the proposals - how will they make a decent profit if Lord Turner gets his way? Hence the remarks of David Frost, director general of the British Chambers of Commerce, who told the BBC's Today programme about his "concern" that businesses just will not be able to "afford it", as "simply to levy" an extra 3% compulsory pension contribution "at this time" would be "very harmful" - before adding, or warning: "Something would have to give", and, significantly, "It could be jobs." However, not all bosses were so alarmed by the commission's proposals. The Engineering Employers Federation has ventured the opinion that the 'Britsaver' plan is "not overly burdensome", while the director general of the Association of British Insurers (ABI), Stephen Haddrill, thought that the plan was "affordable" - so long as, of course, it was responsibly "phased in" and that the "rate at which it is set takes account of British competitiveness". Naturally - for these big-hearted captains of capitalist industry - the bottom line is and always will be profit, not the needs of their workers. Aware of this, Lord Turner himself has attempted to reassure jittery employers that, if implemented, his 'reforms' would only add 0.6% to the labour costs of the private sector. More to the point, though, it is an open secret that Gordon Brown is not happy with Turner's vision - not happy at all. After receiving an advanced copy of the report, the iron chancellor has not been shy to express his basic objections to the proposals - simply, for Brown, they are too expensive. Indeed, so scathing has Brown been about the ex-CBI boss's ideas that many Tories and Liberal Democrats have indignantly accused Brown - and his aides - of actively trying to "scupper" the Pensions Commission and all its works. Gordon Brown's thinking on this matter was presaged earlier this month when the pensions minister, John Hutton, declared that any alterations to the pension laws "must" meet five criteria - they must promote "personal responsibility", be fair, simple, "sustainable" and (yes, you've guessed it) "affordable". Hutton's remarks followed the release of new statistics from the ABI which show that payments into individual stakeholder pensions - the option for those whose bosses do not offer a pension scheme - fell by 10.4% from £109 million in the third quarter of 2004 to just £98 million in the same quarter of this year. Such deals had peaked in the second quarter of 2002, at £187 million. In other words, the likes of Hutton and the ABI fear that not enough people are saving enough for their retirement - a harbinger of future trouble. These fears were reflected in the Pension Commission's interim report, which claimed that more than 12 million people over the age of 25 were not paying into pension funds. Above all else, Brown adamantly opposes any notion of restoring the link between the basic state pension and rises in earnings - let alone actually raising this pension to a "more generous" level, to use the deliberately evasive and slippery words of Lord Turner. Instead, Brown favours the "more affordable" system of supposedly "targeting" help at the poorest pensioners, using the means-tested pension credits system. As part of the anti-'reform' campaign, Brown has written to Turner to 'correct' one of the financial assumptions made in his report, stating that he "should not assume" that the link between pension credits and earnings "will continue beyond 2008" - suggesting that Turner's calculations are built on quicksand. Workers are paying the price for the 'pensions crisis'. Obviously, and quite predictably, personal pensions have continued to fall out of favour due to poor stock market performance, the continued levels of high taxation and, perhaps most importantly of all, a whole series of 'mis-selling' scandals - the most dramatic, and shameless, being the Robert Maxwell affair, which grotesquely saw the latter help himself to the Mirror Group workers' pension funds. How do you know that the same thing will not happen to your personal pension - in which case, why bother having one in the first place? Even those workers who have not lost their retirement savings are feeling the pinch of the pensions crisis. Up to two thirds of all final salary pension schemes are now closed to new members. Longstanding members still enjoy final salary rights, while new entrants are often shunted into inferior schemes which come with little or no guarantees - thus creating an iniquitous 'multi-tier' pension provision. Right at the bottom, of course, are workers with no pension coverage at all. Meanwhile the state pension, linked as it is to price inflation rather than to average salaries, has steadily diminished in relative value. By 2050 - the year when you will have to wait until 68 to retire - the state pension is predicted to be less than 10% of average salaries. Appallingly, workers face poverty and misery as they approach old age - their bountiful reward for a lifetime of wage-slavery. Yes, the "rules of the game" are certainly changing - as Tony Blair chillingly put it recently. Previously, thanks to the legacy of general working class combativity and relative trade union strength - not to mention the existence of a rival ideological-military superpower in the shape of the Soviet bureaucracy - workers managed to win increased living standards. And, of course, better living standards mean better health and increased life expectancy. But now the bosses and their government want to roll back these gains and start to seriously turn the screw. As the Blairites and the Brownites incessantly remind us, the 'good old days' of welfare state, social democratic, capitalism are now history-book stuff. This starkly demonstrates the callous, exploitative and inhuman nature of capitalism. Given the huge increases in productivity and general scientific/technological development over the last half century, we should be expecting - and demanding - a lowering of the age of retirement, not be facing an increase. This is why communists utterly deplore those union leaders who have acquiesced before the government and the bosses, and bargained away the pension rights of future workers. So we have had to endure the miserable spectacle of 12 out of 13 public service unions representing civil servants, NHS and education workers signing an agreement that raises the age of retirement for new entrants from 60 to 65 in exchange for a (doubtless temporary) truce in the assault on current workers' pension rights. Particularly wretched have been the 'Marxist' union activists, especially the Socialist Party comrades in the Public and Commercial Services Union, who claimed the deal was a good compromise under current circumstances - thus plummeting to yet new depths of self-delusional reformism. Congratulations, comrades, you have signed up future workers to an extra five years of wage-slavery. A proud day's work, that must have been ... SP industrial organiser Bill Mullins, speaking at the Socialism 2005 weekend school on November 12, claimed that the deal would lay the basis for a future offensive: "There'll be another generation - won't there be another fight?" (see Weekly Worker November 17). Less than three weeks later, a number of establishment commentators have called for the whole public sector deal to be revisited. Now that retirement at 65 had been conceded for new entrants, it should be imposed on current workers too - as a first step to equalising it at 68. Retirement at 60 is no longer "affordable". The fact that Gordon Brown has rejected any renegotiation of the deal "for the present" is hardly reassuring. So much for the SP's good compromise. And now, with the publication of Lord Turner's pensions report, communists cannot help but wonder whether, a few years down the line, our 'canny' SP, Scottish Socialist Party, etc, comrades will be hatching 'tactical' deals which consign the workers of the future to an extra eight years of wage-slavery. Frankly, the mind boggles. For one, the CPGB will continue to oppose this capitulationism. We stand by the immediate demands contained in our Draft programme, which read: "People deserve a secure, dignified and comfortable old age. The needs of the elderly should be met fully by the state, and should be available by right. Our old people should not suffer the humiliation and anxiety of relying on means tests or charity. The aim of these demands is to mobilise the working class as a whole to fight for pensioners' rights" (section 3.12 - 'Pensioners and the elderly'). It is a gross lie to say that a decent pension and retirement at 65 can no longer be afforded. Yes, people are living longer, but there have been huge increases in productivity and wealth creation. In fact, retirement at 60 should be introduced with immediate effect for all workers, whether public or private sector. The current pathetic level of pensions should be tripled at least. This is what workers need and deserve - and capital must be made to pay. l For the right to retire at 60 - and at 55 in unpleasant and dangerous jobs. l No compulsory retirement. l For a state pension at the level of the minimum wage, paid to every retired person.