Pensioners Have Right to A Livelihood

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Pensioners Have Right to A Livelihood

Steelworkers Step Up Action

Steelworkers' Jobs Threatened

Tanker Drivers Announce Strike

Bush Comfortable with West Bank Occupation

The crisis gripping the whole pensions system in Britain has catapulted itself to the centre of attention of millions of people. For the first time in the country's history, workers have embarked on industrial action to defend their pension rights. Steel workers employed by the Caparo Group, owned by Labour peer Lord Paul, have initiated an overtime ban and called a one day strike for Wednesday, July 17, to oppose the management's decision to close the final salary pension scheme and replace it with a cheaper money purchase scheme.

The final salary scheme provides a significantly larger pension as it is calculated on the basis of a worker's salary in the final working years, while the new "money purchase pension scheme" provides no such guarantee of pension income. Roger Lyons, General Secretary of amicus union, declared that attempts by the mobile phone conglomerate T-Mobile to close its final salary scheme and force its workers onto a money purchase scheme would result in thousands of workers facing "the prospect of losing 40% of their retirement income".

The closing down of final salary schemes has recently skyrocketed. Malcolm McLean, chief executive of the Occupational Pensions Advisory Service, declared: "The trickle of employers giving up good quality final salary schemes in preference for inferior and less well funded money purchase schemes has become a flood." Other big monopolies which have taken this route include the Big Food Group, formerly Iceland, Ernst & Young, British Airways and BT and a recent survey reported that a quarter of small firms intend to wind up or close down their final salary schemes within the next year.

Many firms have cited the proposed change to accounting standards, FRS17, which should have been introduced at the end of June but which has now been postponed, as the cause of closing down the final salary schemes. This rule would have forced companies to report annually on the effects of the stock market on their pension fund. Given the present dive in share prices, many were worried that this might have brought the company's financial health into question and had a negative impact on the company's own share price. For example, 18 months ago the pub chain Scottish & Newcastle reported a surplus, but under FRS17 it would have had to report a £188 million deficit. This, however, is far from the full story. Brendan Barber, deputy general secretary of the TUC doubted that the postponement of the introduction of FRS17 would halt the retreat from the final salary schemes. He declared that "employers will simply look for another excuse to make these cuts".

The present crisis of the pensions system in Britain cannot be explained away by linking it to an accounting rule change. It is the direct result of the demand of the financial oligarchy that its interests should take precedence over everything else and that society should refuse to take up its responsibilities towards its members, leaving them instead to fend for themselves.

The present pensions system in Britain is based on a flat rate basic state pension which at present is £75.50 per week for an individual, or £3,900 per annum. Those pensioners who have no other income and less than £6,000 in savings are eligible for a Minimum Income Guarantee which brings their weekly payment up to £92.15 or just under £4,800 per annum. As well as the basic state pension, there is the State Earnings Related Pension (SERPS) which is linked to an individual's earnings over her or his working life. Both of these pensions are funded by the National Insurance Contributions which are deducted from gross pay during working life. There are also occupational pensions which are linked to an individual's place of work and which he or she pays into, matched by a contribution from the employer. Finally, there are personal pensions which individuals can purchase from companies selling pensions and the recently introduced "stakeholder pension" which is also a personal pension made available through your place of work but which the employer makes no contribution to.

The plethora of pensions and the complexity of the pensions system reflects a simple reality – the refusal of the state to recognise its responsibility to the elderly to provide them with a secure income during their retirement, after they have devoted their whole working lives to the development of the economy and the society. The assault on the right of pensioners to an income to meet their needs in retirement began with the Labour government of Callaghan in 1978 when the mechanism of "contracting out" of state pension provision was first introduced. Margaret Thatcher's government deepened this attack with the 1986 Social Security Act.

Based on the idea that the provision of state pensions was "unsustainable" because people were living longer and those born in the so-called post war baby boom would reach retirement in the early years of the 21st century, the financial oligarchy set a course for withdrawing state pensions and forcing pensioners to fend for themselves. From 1981 the basic state pension has increased in line with price inflation rather than earnings and as a result, it now amounts to about 15% of average male earnings, compared to 20% in the early 1980s. The 1986 Social Security Act also made a number of changes aimed at eroding the value of the state pension and eventually dismantling it. While the SERPS originally calculated pensions as 25% of a workers average income over the best paid 20 years of his or her working life, the 1986 Act dropped this to 20% of the average earnings over the entire working life. This drive to negate the right of retired workers to a secure income had has is effect. Government predictions are that while at present 60% of pensioners' income are provided by the state, this should fall to 40% by the middle of the century. Britain has the dubious distinction of being the only country in which state pension expenditures are forecast to fall, notwithstanding the retirement of the so-called baby boom generation and, apart from the US among the major capitalist states, spends the smallest proportion of its GDP on public pension benefits. This stands at present at around £35 billion per annum or 4.5% of GDP. This compares with France, which spends 9.8%, Germany 11.5%, Italy 12.6% and Japan 7.5%.

In the wake of the state refusing to accept its responsibilities to pensioners and many people fearing an old age of poverty, the so-called pension market has mushroomed. The funds from occupational pensions and personal pensions have been turned into a vast reserve of capital for the financial oligarchy. The National Association of Pension Funds reports that it controls some £650 billion of pension fund assets, which represents the pensions of some 7 million workers from large and small companies, local authorities and public sector bodies and 4 million people in retirement. Over 90% of these funds have been invested in the stock market and when it is borne in mind that today some 97% of stock market transactions are of a speculative nature, it is clear that the financial oligarchy is gambling with the pensions of millions of workers in what is essentially a huge global casino. Now that the stock markets are collapsing, they are attempting to secure their own profits and throw the burden of the losses onto the backs of the workers by closing down the final salary schemes as economically unviable. Whether or not the workers are reduced to poverty during their retirement is not their concern. This is reminiscent of the recent collapse of Enron in which the directors secured their profits before collapsing the company and leaving the workers with no jobs or pensions.

The proposals unveiled on July 11 by Alan Pickering, government pension adviser and former head of the National Association of Pension Funds, is an attempt to further this attack on the right of pensioners to a livelihood. These include forcing people to join company pension schemes which employers do not pay into, removing the obligation on companies to increase pensions in line with price increases, dropping the requirement to pay benefit to a surviving partner and giving employers the right to "re-shape pension arrangements in light of the contemporary economic and other circumstances".

The crisis in Britain's pensions system is a sign of the level of barbarism to which the financial oligarchy is seeking to drag society. Throughout human history, societies at all levels of socio-economic development have taken it for granted that there was a duty on society to look after its elderly who were no longer able to contribute as fully as a result of their age. The idea that they could be thrown to the wolves and told to "fend for themselves" was completely rejected. Yet today, as we enter the 21st century, this is the stand that the financial oligarchy and its government are advancing. The working class and people need to rise in opposition to this programme and fight for alternative arrangements which put the interests and well being of the people at their centre and recognise the claims of all members of society. Rodney Bickerstaffe, leader of the National Pensioners Convention declared that what is needed is "a universal system that will provide financial security to all older people both now and in the future". This is a just demand which should be fought for. Pensioners have a right to a livelihood.

Steelworkers at the Caparo steel works in Tredegar began a work to rule action on Wednesday morning. The workers are withdrawing their goodwill and co-operation, following the start of an overtime ban at the plant last week.

ISTC general secretary Michael Leahy said management at Tredegar, and at Caparo's sister plant in Scunthorpe, had failed to listen to pleas not to scrap workers' final salary pension scheme.

A majority of ISTC members at both Caparo Merchant Bar in Scunthorpe and Caparo Natural Gas Tubes in Tredegar voted for strike action if necessary in defence of their pension scheme.

Unless the matter is resolved, the union has given notice that one-day strike action will begin at Tredegar and Scunthorpe on Wednesday, July17, and continue every Wednesday.

The dispute began when the company announced its intention to close its final salary pension scheme for existing employees and replace it with a stakeholder pension scheme.

Britain's second largest steel company, Allied Steel and Wire of Cardiff, has gone into receivership, threatening the loss of 1,300 steelworkers' jobs.

The company's banks ended financial support for the steel-maker following economic problems in the wake of the US steel export tariffs.

Its shares were suspended on the London Stock Exchange, and chief executive Graham Mackenzie said staff would continue to be employed while receivers KPMG sort out the future of the business.

Nine-hour crisis talks – involving the chief executive, Welsh Economic Development Minister Andrew Davies, Lloyds-TSB and Natwest-RSB and the Department for Trade and Industry – on Monday could not stop ASW's collapse.

In the House of Commons, Tony Blair told MPs that ministers "very much regret" the news. He said, "We will do everything we can to help those employed by the company in these circumstances."

Tony Blair told the Commons he hoped a current World Trade Organisation investigation would declare the White House moves illegal, while Europe and Japan are considering retaliatory measures.

Receiver KPMG's Richard Hill said ASW was the "victim" of the US tariffs. But he said there has already been interest from "a number of interested parties" in buying company assets with sale discussions going on as quickly as possible.

The group's products are mainly derived from recycled scrap metal, making it one of the largest users of recycled material in Europe. It has production facilities in Cardiff, Sheerness and Belfast.

Tanker drivers across Britain have announced that they are to hold a three-day strike. Drivers at P&O Trans European, who deliver petrol and fuel supplies on contract to Shell, announced on Wednesday that they would be staging the 72-hour stoppage after rejecting a 2.5% pay rise.

Negotiations have been taking place between P&O and the Transport and General Workers' Union (TGWU) since January in an attempt to find a settlement. The drivers want a substantial pay rise to reflect what they say is the dangerous and responsible nature of their job.

However P&O has rejected the workers' demand, and last week the drivers voted overwhelmingly in favour of strike action.

Ron Webb, TGWU national secretary, said: "Union members at P&O have suffered for years with low pay increases. Average industry wages are good, P&O and Shell report huge profits, so why are they so reluctant to pay our members fair wages? The vote of 80% in favour of strike action should send a strong and clear signal that P&O should resume meaningful talks to resolve this dispute."

The strike is due to be held from July 19-22. It will involve workers from 13 fuel depots at Buncefield in Hemel Hempstead, Hertfordshire; Shell Haven at Thurrock, Essex; Avonmouth in Bristol; Plymouth; Hythe in Southampton; Haverfordwest; Killinghome and Kingsbury in the Midlands; Stanlow in Cheshire; Grangemouth; Aberdeen and Inverness.

During a press conference on July 8, US President George W Bush reaffirmed his support for Israel's reoccupation of Palestinian towns and villages on the West Bank, and also said that as security improves, he would encourage and press Israel to allow the Palestinian people more freedom of movement. Asked again if he is perfectly comfortable with Israel's presence in the West Bank, Bush said, "I would hope that everybody got the message that we all have the responsibility to fight off terrorist attacks."

Bush also emphasised that any support on the creation of a Palestinian state will depend on reforms, and halting terrorism. "Some progress is being made toward the institutions that I talked about that are necessary for a Palestinian state to emerge that will give us all confidence in its ability to fight off terrorist activities, its ability to receive international aid without stealing the money, its ability to develop a judiciary," Bush said.

On June 24, Bush had issued an ultimatum to the Palestinian people – submit to US-style democracy or face the consequences. He in no way held Israel accountable for its crimes and instead gave the Israeli Zionists a green light to carry out the genocidal campaign against the Palestinian people. Since then, the wanton killing of civilians and wrecking of whole towns has continued. The occupation forces blow up and ransack civil institutions of the Palestinian Authority; bulldoze homes, schools and farmlands, destroy agricultural products such as hundreds of olive trees, and deprive the Palestinians of their ability to affirm their national and human rights. An estimated one million Palestinians have been under day and night curfew. When Israel claims it will ease the curfew, no one knows when or for how long. With total impunity, it is holding the civilian population hostage, effectively imprisoning them in their own homes.

The whole character of the invasion is to destroy whatever the Palestinians have succeeded in building and to completely humiliate and subdue them as a people. This is the essence of the US government's "peace plan".

The Sharon government is now bragging about permanently seizing more Palestinian territory. Further implementing the US policy of assassination as self-defence, the Israelis report they have successfully eliminated all of the West Bank Palestinian activists, military and political leaders on their "most-wanted list". All those killed were simply suspects and none were afforded trials. Not satisfied with these assassinations, the Israeli Zionists now say they will target the "lower-level militants" who could take the place of those killed.

But genocide, assassination and wholesale destruction cannot and will not bring peace. The US, which backs, funds and routinely unleashes the Israeli forces, bears greatest responsibility for these crimes against the Palestinian people and all of humanity.

The cause of the Palestinian people is just. The occupation must be ended now, and the Palestinian state recognised and respected immediately and unconditionally.