CONGRESS 2002: Opening Speech on Pensions, Brendan Barber

CONGRESS 2002, Opening Speech on Pensions,

Brendan Barber, TUC Deputy General Secretary

Congress,

There has rarely been a time when our pensions system has hogged so many headlines.

Today’s pressures - low pay, sky high house prices, paying back student loans, the costs of child care - these were the biggest worries - today’s problems rather than tomorrow’s.

But this is changing and changing fast.

Because we now face a pensions crisis - and it’s getting worse as each day passes.

One element of the crisis is the headlong retreat by so many employers from high quality final salary schemes.

Less than four out of ten final salary schemes is now open to new members. And only today the CBI released figures showing almost 120 employers are currently considering shutting final salary schemes.

Instead of being able to rely on a pensions promise based on their salary level, more and more workers are told their pensions will depend totally on the ups and downs of the stock market.

And, as if that wasn’t bad enough, when employers change the basis of the scheme almost invariably at the same time they chop back the level of their financial contributions.

The annual survey by the NAPF estimated that typically employer contributions fall by around nine per cent when the switch is made.

So, as the employers’ contribution plummets more and more workers will be left unable to save enough on their own to guarantee any kind of decent pension when retirement looms.

These moves represent, in many areas, the most serious real cuts in pay and conditions since the Second World War.

No wonder we have already seen strike action, and I don’t doubt we will see more.

Employers talk about the problems schemes face because of poor stock market performance.

But, of course, they were very happy to take contributions’ holidays when the markets were booming.

Nineteen billion pounds worth of holidays to be precise in the 12 years up to 2000.

This was such an incredibly short-term approach. Of course, if those contributions’ holidays had not been taken those schemes would have built up stronger surpluses to cushion against future market fall.

Did nobody really tell them that shares can go down as well as up?

Thankfully not all employers are so short-sighted. Let’s pause today and praise those who say they will stick with good schemes, who are even making schemes better with, for example, new rights for survivor’s pensions for unmarried and same sex partners.

As the pensions crisis deepens a good pension will do even more to attract and hold on to quality staff as the smart employers realise.

Campaigning to hold on to - and improve - existing schemes is a key battleground. But we face an even bigger challenge still, because, of course, over half the working population have no occupational pension.

And you don’t have to be that smart to guess who these are.

Not Britain’s boardroom directors, they are well looked after.

Not Britain’s MPs - whose pension arrangements have just been improved again - by Britain’s MPs.

Not the city analysts who ruthlessly demand that companies cut costs by closing pension schemes, but have rather nice packages themselves, thank you very much.

No, the most likely to be without pensions are low paid workers, particularly women working part time.

They will have to rely on what the state provides.

Yet here’s another broken pensions promise.

The state retirement pension used to provide 20% of average earnings.

Not a lot - but at least a foundation for everyone when they retire.

But the Conservatives broke the link with earnings.

And this government - despite some welcome help for the poorest pensioners - has not restored that link.

So if we go on as we are by 2020 the state pension will only be worth 10% of average earnings.

That’s not much of a foundation - and it will mean millions of pensioners will be reliant on means tested benefits and the generosity of the government of the day - not something I’d want to take a bet on.

And we all know that even if those benefits were generous, many would fail to claim and miss out, just as they do today.

So we re-affirm again, today, our call for the restoration of the earnings links, and I urge support for motion 74.

Our basic state pension must be the foundation stone if pensioner poverty is to be avoided.

That is our call - and the call of the National Pensioners Convention with whom we work so closely. It was great again yesterday to hear Jack Jones who led the NPC so well for so long at our pre-Congress pensioners rally and now Rodney Bickerstaffe has picked up the baton. The NPC deserve our support - and the Government’s support too for that matter - for all the vital work they do.

Congress, good secure pensions are a sign of a decent European society.

With society getting more prosperous each year, we can afford decent pensions for all.

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That’s why today we launch our Pay up for Pensions campaign on behalf not just of union members, but everyone at work.

Our campaign is calling for a new pensions partnership.

A partnership that recognises that workers, employers and government must all play their part in providing pensions.

Government must provide the foundation for everyone by restoring the state pension’s link to earnings. Once again pensioners should automatically share in rising living standards. Government must pay up for their share.

Employers must play their part too so that everyone is able to build up a decent occupational pension. So, employers must provide a pensions contribution for every employee. Of course it will need to be phased in - as a similar scheme was in Australia.

But pay up they must.

And we are not trying to escape our responsibility as employees.

Where there’s a decent pension scheme, we say that employers should once again be able to make membership of a quality pension scheme to which they contribute a condition of employment. We must pay up too.

A three-way partnership. Government, employers and employees all playing their part.

Each paying up for pensions.

Congress, the General Council’s report sets out a strong and persuasive case for change.

Because without action the crisis will just get worse.

The flight by employers away from high quality schemes is already disastrous.

Like lemmings they are rushing to the cliff edge - taking ordinary working people’s future security with them.

The Government are finalising their review of the options for change, and we expect to see a Green Paper this autumn.

I say to Ministers, don’t duck it.

We can already hear the employer community whispering away that radical change is not really needed - just leave it to them to decide.

That would just not be good enough.

Congress this is a great cause - a vital campaign.

Let’s all pay up for pensions.

I commend the General Council’s report.