Outrage over paltry pension rise
by Daphne Liddle The annual rise in the basic state pension in Britain next year is likely to be just 75 pence. This is because the figure is tied to the official inflation rate which is currently running at 1.1 percent — partly due to a price war among supermarkets. Pensioners are campaigning fiercely for the pension to be linked once again to average earnings which would give a more respectable rise. Former Labour Cabinet Minister Barbara Castle was outraged at the proposed rise — 'though she had predicted it at Labour's annual conference last month. She accused the Labour Government of betraying its election promises. "It won the election on a promise to make the basic state pension the foundation of our pension provision. But, just as the Tories did, it is allowing it to decline steadily relative to the standard of living of the rest of us", she said. "It's putting people who have contributed all their working lives — they have to, by law — into a sort of unfair category." Jack Jones, President of the National Pensioners' Convention, commented: "Next year's rise will be peanuts and pensioners will fall further behind the rest of society." Even Frank Field, the former Social Security Minister, said the Government could afford to do better and called for a L15-a-week increase for those over 80, financed by the "spare" money within the national insurance fund. Many unions are now putting their weight behind the pensioners' claims including the giant public sector union Unison. The Government's policy is to let the value of the state pension wither and to drive everyone to take out a private pension, an occupational pension or one of the new "stake-holder" pensions. These are designed for those who cannot afford other private pensions because they do not have a consistent working record — through disability, childcare responsibilities, unemployment or the casual nature of their job. But stakeholder pensions will be cheap and nasty. Those with very low incomes will be able to pay very little into them and get next to nothing out. All the stakeholder pensions will do is put the holders just above the level where the Government would have had to top up their state pension with Income Support to save them from starvation. Nor are occupational pensions secure. The steelworkers' union, the ISTC, has accused British Steel of raiding hundreds of millions of pounds from its pension fund to help finance its merger with the Dutch group Hoogovens to create the Corns group. Last march British Steel declared a pension fund surplus of L1 billion. The ISTC and other unions proposed using some of the money to help low earners, making a one-off L500 payment to pensioners and gradually lowering the retirement age from 65 for men to 60. "British Steel have now told us they are going to act unilaterally. They are going to take L863 million of the surplus for themselves", the union said.
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