Link to this page: https://secure.socialistparty.org.uk/issue/481/2245
The Socialist 4 April 2007 |
Join the Socialist
Brown's pension robbery
THE TIMES has revealed that one of Gordon Brown's first acts as chancellor in 1997 was to give big business the green light to cut workers' occupational pension schemes.
They quote one former minister saying that Labour MPs would think twice about Brown becoming leader when they feel the public anger about pensions, as they campaign in the local elections. He said a cab driver had just told him: "You bastards raided my pension".
According to recently released papers, Brown ignored advice from civil servants and ended the tax credit on dividends that the pension funds got back from their investments in stocks and shares.
When Brown ended this it was the signal for many companies to end final salary schemes.
Pensions are deferred wages. When the workers affected found that they were not going to get a pension based on their final years' salary but something far less, there was furious reaction.
The Labour government has pretended over many years that it was nothing to do with them but was a result of workers living too long.
The ending of tax credits was not the only reason for the widespread ending of what was known as "defined pension rights". Companies also took massive "pension holidays" - they stopped paying employers' contributions. Through this they saved over £20 billion between 1987 and 2003. The TUC estimates they saved £4,000 a worker every year.
The news is being seized on by the Tories who are using it in the run-up to the May elections. And bosses' union the CBI say they did not support the changes. But this is like a gang of thieves falling out over splitting up the loot.
As a result of this, seven million workers are substantially worse off. You can guarantee that none of the bosses, or politicians like Brown are worse off.
Brown's own pension as chancellor at £53,000 a year will more than double when he becomes prime minister to £123,000 a year.
The cabinet as a whole has a nice little pensions pot of £25 million paid for by tax payers, there has been no contributions holiday for them.