Chancellor Brown To Scrap Pensions Deal


EX-CBI bosses leader Lord Turner’s report into the future of pensions – commissioned by the Blair government – is due to be published on Wednesday.

It has already been rubbished by Gordon Brown who has said that it is unaffordable, and in particular opposed the idea put forward by Turner of reinstating the link between annual pension rises and annual rises in average earnings.

Turner wants this link restored as compensation for raising the retirement age from 65 to 67.

Chancellor Brown wants the link between pension rises and the government’s inflation rate – which is a complete and massive understatement of inflationary price rises – maintained.

He is for the retirement age going up, while the value of the state pension goes down.

He has also warned Lord Turner that by 2008 the means-tested Pensions Credit scheme will be linked to the inflation rate, and not to average earnings.

Lord Turner’s and Brown’s interest in whether ‘the country’ can afford the current pension arrangements is focused on the working class and the middle class; it does not extend to the ruling class and its servants.

There are very good reasons for this. Lord Turner’s successor at the CBI, Digby Jones, is on a £2.3 million salary and has a pension pot of £14 million.

The TUC has just produced figures to prove that the directors of the top 100 companies have a collective pension pot of £9 billion, which if claimed now would bring them in £167,000 a year.

The Chancellor’s own pension is not a small one, and it is index linked, to ensure that it is not ravaged by inflation, unlike the pensions of the poor and the working class. The Chancellor is out to curb the ‘excessive’ pensions of the working class in the public sector, while the ruling class and its servants are to retire in luxury.

He has already told over two million local government workers that their retirement age will have to go up to 65 or whatever the national retirement age is to be, and their final salary pensions are ‘unaffordable’ and will have to be ended.

He is determined that if the retirement age is to be raised to 67, the recent deal made with teachers, health workers and civil servants, for all new starters to be on reduced pensions and to work till the state retirement age, while the established workforce will still be able to retire at 60, must be revised to have a retirement age of 67 for all.

The same Chancellor has now told the entire public sector that while the price of basic necessities rockets through the roof, they must not get an above-two-per-cent pay rise. This is below even his own inflation rate.

The truth is that the capitalist crisis is destroying the credit mountain that the Chancellor termed his economic miracle, leaving him no other option but to ruthlessly cut pensions, wages and jobs.

The trade union bureaucracy, that is still slavishly backing Brown as the leader to succeed Blair, has now been forcibly woken up to the fact that there are no serious policy differences between the two.

Their answer to this ‘shock’ is to do nothing. They continue to neglect the interests of their members and allow the bosses and their government all the time they need to prepare draconian measures against the working class.

The trade unions must have a new leadership. It must stop any return of the Tories by taking action to bring down the Blair government to go forward to a workers’ government that will carry out socialist policies. If capitalism cannot afford decent pensions and a civilised retirement age, then it is capitalism that must go, not the gains of the working class.

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