Bosses' hypocrisy on public sector pensions

As 1.5 million workers gear up to strike over pensions, Iain MacKay reports on the hypocrisy of blaming public workers for company pension-gouging

Submitted by Freedom on February 7, 2006

Gordon Brown has questioned the deal agreed by the Government to allow public-sector workers to continue to retire at 60. While Downing Street and the Department of Work and Pensions insisted that the deal with the unions would not be unpicked, the unions, who called off a strike when the deal was struck, renewed their threat of industrial action.

Brown raised the pro-business standard addressing a CBI conference in London. He was worried that the recent public sector pensions deal will prove too expensive in the long run. The fear of the CBI is that state pensions cost taxes, and company pensions cost profits.

What is particularly galling about the pensions issue is the hypocrisy. It was staggering to see a CBI spokesman twittering on about "unfairness" on the news or hear the director of the British Chambers of Commerce arguing that "what we are going to end up with here is two nations. That will create real resentment in the workforce."

Employers warn of a "two-tier" pension system and John Sutherland, the CBI president, opined that the government "must treat all equally and fairly. It cannot expect private sector employees to work until sixty-seven to finance the pensions and early retirement of public sector employees who retire on inflation-proofed final salary pensions at sixty. Society can no longer afford such schemes ...and such inequality is unacceptable."

The CBI made no comments about the existing "two-tier" pensions system, that between bosses and workers.

Apparently, it thinks that this society can afford the millions paid to the bosses. In 2001, it was announced that UK bosses were the best paid in Europe, earning an average of £509,019 a year. Meanwhile, the UK's manufacturing employees have become the lowest paid in the developed world.

Of course the CBI is not arguing that private sector workers should receive the same deal as bosses. Nor even the same one as public sector workers. No, rather than level up, all workers are to have their pension deals levelled down and they are using the issue to divide workers against each other.

The last thing that the private sector wants is its wage slaves wanting a better deal and so they want them to help bring down their more fortunate fellow workers down to the level the bosses think is best.

Given this, the imposition of a later retirement age in the public sector would strengthen the private sector's hand as it attempts to enforce the same on its workers.

Thus the bosses' real worry about the "two-tier" system -- if public sector jobs have better pensions then private industry will have to provide the same.

In February, 2003, it was reported that two-thirds of the workforce were now earning less than the average wage, up from 60% ten years previously. The rising wage inequality was as a result of huge pay deals for executives and directors. Top pay has been increasing faster than for the rest of the workforce.

The CBI president did not rally against other forms of inequality, at the unfairness inherit in 23% of UK wealth being owned by 1% of the population or that the wealthiest 10% own more than half the wealth.

Nor did he ponder why "society" cannot afford to pay for pensions but has enough to invade Iraq, impose ID cards or replace Trident.

Finally, it does seem strange that the CBI, representing as it does the private sector, should lecture the public sector on this issue.

Nor should we forget that it was the Tories who advocated these schemes after breaking the link between state pensions with average earnings in favour of the Retail Price Index.

In summary, the so-called pensions 'crisis' is really a battle. It is between the priorities of capital and those of human need. It is a case of what we need to live and not whether the system can afford it. If enough pressure is generated from below, then what can be afforded will change accordingly -- as will what people want and the kind of society they wish to live in.

* 1.5 Million may strike over pensions