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From The Socialist newspaper, 11 December 2004

Special Feature

Saving pensions: United action needed

WHEN CHANCELLOR Gordon Brown announced 104,000 civil service job cuts in his last budget, Socialist Party trade unionists called for a one-day public-sector strike in response to New Labour's public-sector onslaught.
Since then, Socialist Party members in civil service union PCS and other unions have been to the fore in promoting this idea.
Now, other union leaders have begun to take up the call, especially concerning the attack on pensions.
Over the next month, Socialist Party members in the trade unions will be pushing union leaders to turn their words into deeds before the general election.

MILLIONS OF public-sector workers are faced with huge cuts to their pensions - some from as early as April 2005.

Ken Smith

In response, a number of union leaders - under increasing pressure from their angry members - are threatening strike action in the run-up to a general election. This is if the government scraps final salary pension schemes or other vital aspects of current pension entitlement.

Gordon Brown, desperate to cut as much public spending as possible, wants to reduce the government's responsibilities as an employer. He wants to follow the road trodden by private employers in effectively cutting workers' pay by slashing their final pensions and basing pensions on a "career average" salary.

This will mean thousands of pounds a year being robbed from many of the lowest-paid local government workers who are facing retirement in just a few years time. New entrants into teaching, from 2006, will face "career average" salaries. Linked to this is the likely ending of the allowance to retire at 60 on a full pension if they have served so many years.

Now, regardless of how many years they have worked, public-sector workers face having to work to 65 before they can claim a full pension. In effect, they are being made to work five years longer. For some workers, this will mean working until they drop dead.

Pay cut

Finally, the government wants to take more from workers now by compulsorily increasing their level of contributions. This is whilst the government decreases its employer contributions. Again, this is effectively a pay cut.

Many young workers are struggling to pay off student debts and pay the mortgage for their first home. This will have a devastating effect on their finances.

The government is aware of the outcry and has made some cosmetic changes to their plans. Amongst teachers, for example, new staff will face changes from 2006. For existing staff, the changes will only be introduced after 2013. For existing teachers under 50, there are some transitional arrangements proposed but these will also end in 2013.

Similar 'transitional arrangements' are being proposed in other areas of education, the fire service and for some sections of local government workers. And, at the time of writing, it looks like the government is about to propose similar changes for civil servants.

Trade unions - like the GMB, Amicus and TGWU - are already facing a massive pensions crisis amongst their members in the private sector. Some workers are facing the prospect of no pension at all after their companies have gone bust - taking the pension scheme with it. Many other private company pension schemes are seriously underfunded after the bosses took long-term pension holidays - opting out of paying contributions - in the 1980s and 1990s, and because of the decline in stock market values (see page 15).

Deferred wages

For all workers, pensions are in effect deferred wages. Any attempts to change them now amounts to a pay cut.

GMB union leader, Kevin Curran, has already faced an outcry from his members in the private sector. Now he says that thousands of GMB members are phoning the national office demanding action from their union.

Similar pressure is being felt by other union leaders. Dave Prentis, currently leader of UNISON, is facing re-election and hoping to appear radical. He has warned of a strike by public-sector workers before a likely general election in 2005.

Public sector workers looking for a lead will welcome these statements. But they will want to know they are not just words designed to get minimal government concessions.

Public-sector trade union leaders are meeting at the TUC on 13 December to discuss the possibility of co-ordinated action. Mark Serwotka, PCS general secretary, has already clearly called for the unions to argue for a joint negotiating position and for co-ordinated strike action in spring 2005 by education, health, local government and civil service workers.

It's possible the government may temporarily retreat and defer or lengthen the timescale of introducing changes. They would want to avoid a public-sector general strike in the immediate run-up to the general election.

Partial victory

Although this in itself would be a partial victory, it would only be a temporary stay of execution. Public-sector workers and trade unionists will instinctively understand that the best time to take action and force the government to fully retreat would be before a general election.

Public-sector trade unionists must demand that their leaders don't let New Labour off the hook and organise one-day strike action before a general election.

There are two groups of public servants who are exempted from the current proposed changes: MPs who recently voted themselves the best pension scheme in Europe and say they can't afford it for anyone else, and top judges who threatened a withdrawal of labour if their privileged pensions were touched.

For once, workers will want to take an example from the judges and take action to protect their pensions.

A few unions, like the NUT teachers and Fire Brigades Union, already have conference decisions committing the union to industrial action if their pension schemes are changed. The local government section of UNISON has lodged a request to hold a ballot for industrial action over pensions.

A number of local NUT associations have held indicative ballots showing strong support for industrial action to protect their pensions.

After the TUC meeting on 13 December, trade union leaders will be going back to consult their executives and memberships over what to do next.

Socialist Party trade unionists will be asking trade union members to call on their leaders to co-ordinate industrial action and force the government back.

In particular, branches and union organisations should pass resolutions (see below) committing their union to supporting and organising a one-day strike by public-sector unions and workers.

Lobby the TUC. Monday 13 December, 10am Congress House. For more details ring Ken Smith on 020 8988 8778.

Suggested resolution on public-sector action

This committee/branch etc fully supports the call made by Mark Serwotka, PCS general secretary, for a co-ordinated one-day public-sector strike in early spring 2005 to defend pensions. This call was made at the TUC lobby of Parliament on 16 November 2004.

We must, as Mark said, avoid the danger of the unions acting separately on this issue and on the general defence of public services. We must not let the government pick off unions one by one.

We believe that a common negotiating stance involving 'unity in action' is essential.

We therefore call on our union national executive to:

Teachers: an old age in poverty

SOCIALIST PARTY candidate Roger Bannister is absolutely right to make the pensions issue central to his campaign to win the leadership of UNISON.

Robin Pye, St. Helens

In a survey of NUT members in St. Helens, 89% said that they would like to take industrial action to defend their pensions. Pensions are always being raised as the most important issue at workplace meetings.

The New Labour government plans to raise the retirement age from 60 to 65. Teaching is a job that tears at your nerves. Very few teachers see themselves being able to teach beyond the age of 60.

Those who think these measures will lead to children being taught by teachers in their 60s have missed the point. Compulsory health screening and vicious sickness policies will ensure that most teachers have been forced out of work long before they qualify for their full pension, which means they will spend their old age in poverty.

No wonder teachers expect their unions to lead the fight against government pension plans.

Civil servants: we've been robbed!

WHEN COLLEAGUES in my office heard about New Labour's plans to attack our pensions, several of us stopped work immediately we were so worried. Some staff, even those not in the union and those normally very conservative, were shocked, and very upset.

Mick Philipsz, Department for Education and Skills (DfES), London

There is an even greater state of disbelief in the DfES than there was when we heard about the redundancies in April. At the moment our pensions are based on the best pay we get in our last three years. Now, if New Labour get its way, it is going to be based on the average over a career.

What that actually means for me is that if I slave away for years, and finally get a promotion shortly before I retire - a hope all my colleagues share - I will effectively be living in poverty.

My pension will be as much based on the pay I received as a young man joining the civil service in the 1980s, as it will be based on my salary ten years from now.

I feel cheated - I cannot yet afford a mortgage in London but at least with a mortgage the payment period is not suddenly protracted for no reason. I have always seen my pension as deferred pay and it feels to me, and those that work with me, that we have literally been robbed.

Womens' pension scandal

THE SCANDAL of womens' pensions has been exposed in a TUC report. Low pay, part-time work, jobs with no pension scheme and a shorter working life, mean that many women are facing poverty in old age. 43% of women who are working, work part-time. And womens' full-time hourly pay is only 86% of mens.

Only half of women now getting to retirement age qualify for a full state pension. Now, many young women are saddled with student debts, which mean they can't save for old age.

The TUC held a conference: "Pay Up for Womens' Pensions" on 6 December, where TUC general secretary Brendan Barber emphasised how women are penalised for taking time out of work to bring up children.

Private pensions scandal 1

ABOUT 40,000 existing and former workers at Turner and Newall are facing losing their pension. The US owners of the car parts firm, Federal-Mogul have withdrawn their offer to continue funding the pension scheme.

If the scheme is wound up, it would be the biggest closure of its kind and it would mean exiting workers getting less than 40% of what they were expecting.

Talks between Federal-Mogul, which is in bankruptcy protection and the pension fund's trustees have broken down.

Federal-Mogul was forced into bankruptcy protection because of its liabilities for paying claims from former workers with asbestos-related health problems. Bearing responsibility for the workers they employ is obviously not one of Federal-Mogul's strong points.

Private pensions scandal 2

WORKERS AT the Carpets International plant in Newbridge, South Wales, are facing the loss of up to 60% of their pensions. Before the firm went out of business it took a "pensions holiday" for seven years and never resumed payments.

After the company went into voluntary receivership it was subject to a management buyout in November 2003, when it became Abingdon Flooring. Abingdon Flooring operates as a separate company and employs 350 workers at the Newbridge plant.

Some pensioners have had letters informing them they will be getting 1,000 a year, not the 3,500 a year they were expecting.

TGWU branch secretary Lawrence Long expressed the workers' and pensioners' anger when he said that companies were: "Allowed to walk away from pension schemes when there are massive deficits."

Plunging public services into chaos

THERE ARE nearly 8,000 Department for Work and Pensions (DWP) staff in Wales. If the national figures for the planned cuts were applied, there would be a gross reduction of 2,600 and net reduction of 1,950 staff.

Katrine Williams, PCS DWP Wales secretary

Only a tiny proportion of staff are not 'frontline' - ie dealing with the public. Those who don't deal with the public are necessary to support the large numbers of staff in the department.

Since the creation of JobCentre Plus, with the merger of JobCentres and Social Security Offices (SSOs), there has been a drive to close offices. The emphasis is all on work-focused interviews and getting claimants back into work, rather than paying benefits. Management wants centralised processing units and contact centres, removing the local service to the public.

Offices to be closed in Wales include Rhyl Social Security Office, with 250 staff. In September 04 this office had 3,500 people calling into the office, as well as countless phone queries. Rhyl and Denbighshire is a deprived, low-wage area.

Benefit processing for the whole of Wales is being reduced from 39 sites to six processing centres. Management's figures show 1,375 staff working in these six processing sites. This is a vast reduction in staff and will decimate the service to the public.


Management believes that benefit processing is just a matter of inputting data and the claim comes out the other end. But it takes two years to train processors, as the benefit system is so complex and people's lives are complex. The computer systems are inadequate and a lot of time is spent working around the system.

No computer system introduced into the department has ever worked or created less work. The new 'CMS' system, introduced for contact centres taking new claim details, does not work and is creating chaos for Pembroke Dock contact centre which deals with calls from London. The Child Support Agency (CSA) computer system does not work.

Smaller, local processing teams, when they are properly staffed, provide a much better service to the public. Claimants can speak to the person dealing with their claim. Understaffing is a problem because of management undervaluing the importance of paying benefit. Large, impersonal processing factories do not provide a better service.

People will be forced to travel further for advice and payments. Attending compulsory work-focused interviews for everyone under 60 on benefit will increase tensions.

Staff in JobCentre Plus offices, without the full knowledge of the complexities of the benefits system and without the backup of local experienced processors, will be put at even more risk from an increasingly angry and frustrated public.


The ethos of JobCentre Plus is no longer about paying people benefit on time and at the right rate. The emphasis is mainly on job entry targets

The Pensions Service deals with all benefits for the over 60s - retirement pension, pension credit and winter fuel payments.

Work and pressure has been transferred to the Swansea Pension Centre, with many fairly new staff. Stress levels are already unbearably high in this workplace. Swansea has already started to take work from Cornwall, on top of dealing with all the pensioners in Wales. It was originally set up as a paperless office, with the plan to scan all the documents. This new technology has never worked.

In Wales, we have the highest proportion of pensioners on means-tested benefits, compared to other government office regions. So our pensioners are more likely to be living in poverty and need the support of locally based staff to ensure they claim all they are entitled to.

Pensioners are being thrown out of JobCentre Plus offices, as they only deal with under 60 year olds. So actually sitting down with a person to discuss your claim or check what a letter is about is becoming increasingly difficult.

Wales also has the highest proportion of people claiming Attendance Allowance and Disability Living Allowance.

Child Support Agency

The Child Support Agency (CSA) deals with child maintenance claims for absent parents. There will be a 50% cut in face-to-face services, with the closure of six offices.

The CSA's chief executive has had to resign over the complete chaos created by a badly designed, non-functioning new computer system. Staff have had to work under extreme pressure to try to continue providing a service with a failed computer system. The PCS is demanding that all planned job cuts are put on hold because of this.

Social Fund is currently processed in all JobCentre Plus districts in Wales providing a service to people of all ages claiming benefits. Management is planning to centralise all these sections into Wrexham which will create complete chaos.

People will need to ring up to apply for crisis loans over the phone, when they are in urgent and desperate need.

It is already common for people to have to spend most of the day constantly dialling to get through locally where this system is in place - when the payment of crisis loans, by their very nature, needs to be sorted out very quickly on the day of the application whenever possible.

A lot of our files are currently stored remotely in a privately run Capita storage unit in Heywood. The Department is billed per search rather than for retrievals of documents and files, so there is a low success rate in getting documents returned to us.


About the same number of clerical staff have to be employed to prepare the documents and databases for sending them to Heywood and retrieving the documents, as were employed when filing was done locally. And we had a far better quality of service.

Although there is some saving for the department in closing offices and reducing the number of buildings, this is only for heating, water etc. The maintenance and ownership of the buildings and contents has been privatised to Land Securities Trillium, so they are set to make a fortune out of prime town and city centre locations.

Every SSO closed since 1998 and every JobCentre closed since December 2003 has benefited this private company.

Access to correct, accurate benefits advice is vital to give people the means to live. The harder it is to get information and the more the service is cut and plunged into chaos, the more of an impact that it will have on those who are most vulnerable in society and the most in need of support.

Cutting our services will therefore have an impact on people's health and well being and is likely to increase pressure on the health budget.

Also, the increasing insecurity and pressures of an understaffed service is having an impact on the health of our staff. Staff are increasingly going off sick with stress and depression.

We have harsh sickness absence procedures and a bullying management intent on reducing staffing numbers by any means, so we are seeing an increase in 'inefficiency' action being taken against staff.

Our working conditions are increasing the likelihood of staff ending up on the other side of the counter.

Our jobs and pensions are not for sale

AS 2004 draws to a close, PCS members will be reflecting on an eventful year. The majority of PCS members are civil service workers. Many are low paid, many are women who combine work with domestic responsibilities. Many are from minority ethnic backgrounds who suffer discrimination in society and the workplace.

Janice Godrich, PCS national president, personal capacity

However, they all have one thing in common. They work hard, often in a pressurised environment, with the threat of privatisation hanging over them, to deliver government targets and manifesto commitments.

Imagine then their horror at watching Gordon Brown deliver his Budget speech on 12 July and see him announce, live on television, the sacking of over 104,000 of their jobs and attacking hard-fought-for conditions of service. That was the down point of the year.

The response from PCS was swift and determined. We rejected Gordon Brown's ad hoc savage attack - designed to 'out Tory' the Tory fox and being seen to be tough on public spending - without a second's thought for the stress and anxiety this would cause our members and their families.

We have organised our fightback. Our campaign includes parliamentary lobbying, members' meetings, adverts in the media and an alternative vision for the public sector. But, most of all, the first civil strike for over ten years on 5 November saw our members turn out in unprecedented numbers to show their anger at the way they were being treated by this government.

Over 8,000 new members joined the union in the run-up to the strike. Over 6,000 members attended rallies and demonstrations across the country. The members' solidarity, activity and commitment was a credit to PCS and they should rightly be proud of themselves.

The leadership of PCS is totally committed to win this campaign on jobs, conditions and defending pensions.

My message for 2005 is our jobs are not for sale, our conditions are not for sale and our pensions are not for sale.

I would urge all public-sector unions to join with PCS, strengthen our campaign and let's defend all our members and public services in a united and determined way.

Cuts will affect child protection

SCHOOLS INSPECTORATE Ofsted has announced a swingeing programme of job cuts and office closures as part of the government attacks on the civil service.

An Ofsted Public and Commercial Services union (PCS) rep

Eight offices (of the current 12) are to be closed by 2006 and staffing levels are to reduce from 2,813 to 2,280. Up to 700 staff will be made redundant. These job cuts are concentrated in the Early Years sector, which deals with childminders and nurseries and has some of the lower-paid grades.

Although staff have the option of relocation to two of the remaining offices, or applying to redeploy to another civil service department, this will not help the vast majority.

Management has refused to give a guarantee of no compulsory redundancies and are effectively making up to 700 compulsorily redundant. Notice may be given as early as March 2005. Management has refused to discuss efficiency savings that do not adversely affect staff welfare or child protection.

These cuts are devastating and not only for the staff affected. Child protection will also be seriously affected. Already the number of checks done on the suitability of nursery staff to work with children have been cut back. There is a growing emphasis on complaints against providers being investigated by the providers themselves!

Last year, a management internal survey showed that bullying and stress are rife within the organisation. One in five staff said they had been subjected to bullying at the hands of management in the previous years. These cuts will only increase these pressures.

The PCS branch will continue to oppose these cuts and to expose the dangers they bring about.

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The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

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In The Socialist 11 December 2004:

Bring the troops home

US plans crumble in Iraq

Socialist Party campaigns

Schools victory!

Private contractors rip off public services

Saving pensions: united action needed

Britain's Guantanamo

Christmas 2004 Appeal Letter

International socialist news and analysis

USA: Poverty in the world's richest country

Concrete steps towards formation of new party

Italy stops in fifth general strike against Berlusconi

Belgium: Fighting the fascists in Gent

Socialist Party workplace news

Challenge to UNISON'S Labour links by UNISON general secretary candidate

BBC jobs under threat

Fighting the fire service cuts


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