The Guardian October 27, 1999


Britain:
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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New Worker

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