The Right of Pensioners to a Livelihood Must Be Recognised!

Workers' Daily Internet Edition : Article Index :

Green Paper on Pension Reform:
The Right of Pensioners to a Livelihood Must Be Recognised!

Joint Statement by the TUC, Consumers’ Association and Help the Aged:
Facing up to the Pensions Challenge

Taking a Stand for an Alternative to the European Union

An Alternative Europe Is Possible!

The Green Paper containing the government’s proposals for the reform of the pensions system was unveiled in parliament on December 17 by the Pensions Secretary, Andrew Smith. Central to the proposals are the rejection of pensioners' right to a livelihood and the government's demand that, with regard to pension provision, individuals must fend for themselves. The Green Paper declares, "We all want to be able to retire on an income that meets our expectations, and as we live longer and healthier lives, we need to save more or work longer so that we can make the most of our retirement." In this way, the fundamental right of workers, who have spent their working lives contributing to the well-being of society, to be provided with a livelihood during retirement, is wiped out. Instead, society's responsibility to pensioners is transformed into an individual problem which each individual pensioner must solve either by saving more during their working lives or increasing the length of their working lives.

Further on, the Green Paper states that it is the government's intention to "renew the partnership between the Government, individuals, employers and the financial services which has long been a strength of the UK pensions system". Therefore, the government is signalling its intention to continue pressing down the road of handing over the workers' pension savings to the financial oligarchs to gamble on the stock market. It is precisely this course of action which has brought the pensions system to its present state of crisis, as stock market values have tumbled and the speculators have shifted the burden of stock market losses onto the pensioners. The depths of this crisis is let slip by the authors of the Green Paper who acknowledge that, according to present estimates, up to 13 million workers or just under half the workforce are likely to be affected by the "under-saving" in the pensions system.

Starting with the orientation of forcing pensioners to fend for themselves and handing over their retirement savings to international finance capital to gamble on the stock markets, the Green Paper proposes further attacks on workers conditions and rights. One of its key proposals is abolishing the fixed retirement age, which Andrew Smith described as "increasingly anachronistic" and encouraging workers to work pass the present statutory retirement age. This proposal and the way in which it is presented reflects the Government's approach of dragging workers' conditions back into the 19th century while shouting slogans of "modernisation" and "moving into the 21st century".

The Green Paper also proposes raising the pension age of public service workers from 60 to 65 for new entrants, while not ruling out that at some later date this could be extended to existing public service workers like teachers and nurses. It also floats the balloon of raising the state pension age to 70, while making no definite proposal to do so. Clearly the government is floating this idea to get people accustomed to it, so that at some later date it can be introduced as a "modernising reform". A further proposal is to raise the age at which people can take early retirement from 50 to 55 and the Green Paper states ominously that the government intends to "provide extra back to work help for those aged 50 and over and pilot measures to help recipients of incapacity benefits return to work". Other proposals include allowing employers to make membership of their pension scheme compulsory, a commission to investigate whether workers should be forced to make additional private pension arrangements, changes to the tax regime for pensions and new regulations on providing advice and selling pensions.

What the Green Paper does not address is the systematic robbery by the financial oligarchy through pension schemes of the surplus value produced by working people. A so-called "black hole" is being talked about, the alleged difference between the pension contributions and what will be needed to fulfil the pension obligations. But the government is accepting no responsibility for and taking no action against the theft of the workers’ savings. Nor is it viewing pensions as a matter of applying the social product to take care of the needs of those of pensionable age. It is made rather a question of market forces, not a question of right. It is a massive step back even from the necessity of government having a social conscience that was made the basis of the welfare state and full employment after the Second World War.

The government's Green Paper is a further step in its attack on the rights of workers, particularly those who have retired. The working class and people must demand that society respect the right of pensioners to a livelihood and take up the work to bring such a society into being.

Britain is facing a pensions crisis, the joint statement said on Monday, December 16.

The basic state pension is not keeping up with living standards. Employers are retreating from final salary schemes and their contributions to money purchase alternatives are much lower. The government is seeking to shift the burden of pension provision from the State to private saving.

Individuals are asked to contribute more and more – because their employers are contributing less – and are bearing more of the risk of pension provision.

Urgent action is needed. If the Government fails to meet the pensions challenge squarely then today’s workers will retire in poverty.

The government is shortly to produce a Green Paper on pensions. Our joint statement sets out some tests that the Green Paper must pass.

All three organisations agree on a broad agenda, if not on every policy detail. This starts from a realisation of the problems we face, and an agreement that solutions must be based on a shared responsibility between the individual, the state and employers.

• The Green Paper must construct a secure framework for pensions that allows people to plan for retirement with confidence, and enables the retired to maintain a decent standard of living and participate fully in society
• The Government must give an unequivocal commitment to maintain the basic state pension as the foundation stone of the UK’s pensions system. The state pension should guarantee a reasonable minimum income for all pensioners. More should be done to help the oldest pensioners (particularly the over 80s) who are also the poorest pensioners
• The Government must recognise that employers and employees who can afford to do so must play their part in providing for retirement. The simplest and most effective way to do this will be to phase in compulsory pension contributions from employers and individuals
• There must be greater choice and flexibility so the individuals can decide when they want to retire. Far too many people over 50 are now outside the labour market and believe that they have no reasonable prospect of employment. This must change and we look forward to legislation outlawing age discrimination. Employees should also be free to work beyond their normal retirement age if they so wish. They should be able to claim a pension from their employer and continue working reduced hours for that employer
• Pensions regulations should be simplified to make it easier for employers to provide pensions and for individuals to understand the pensions system. Similar regulatory requirements should apply to final salary and defined contribution arrangements. The number and complexity of money purchase arrangements should be reduced, building on the model of stakeholder pensions. Individuals must find the system simple to understand and flexible enough to meet their needs
• The Green Paper must contain proposals to widen access to pensions advice and information
• The pensions system must reflect today’s social realities, not an outmoded view of the male breadwinner supporting a traditional family. The low paid, part timers and women are poorly served by the current pensions system. The low paid – mainly women – usually suffer the most from current pension arrangements. The new arrangements must deliver fairness for the most disadvantaged
• Part of the process of simplification demands new pension schemes established on a regional or sectoral basis. This will make it easier for employers, particularly small and medium sized firms, to offer high quality pensions to their employees. New schemes also demand new governance arrangements. We believe that the trust-based structure of final salary schemes is a good model of governance and we favour an equal number of employer and employee trustees
• Rebuilding the UK’s pensions system on a secure foundation requires wide consensus and a commitment to long-term policy solutions. We believe that the government would benefit from the assistance of an independent body that could give authoritative advice, undertake expert analysis and offer solutions to specific problems. We believe that the establishment of an institution that has the support of all stakeholders will help to ensure that a durable pensions settlement is established

John Monks, TUC General Secretary, said: "Britain's pensions crisis runs deep, and requires urgent action. The Government must take notice of this wide coalition with so much in common."

Sheila McKechnie, Director, Consumers' Association, said: "The pensions system is in desperate need of a radical overhaul and requires urgent, focused and persistent government attention. With an increasing shift away from state provision, the crisis can no longer afford to be treated like a political football. The Government needs to remove policy decisions on pensions from political interference and work with all stakeholders to build a new pensions structure for all consumers. If it fails the standard of living for consumers in retirement will be reduced to a mere gamble on the stock market."

Mervyn Kohler, Head of Public Affairs, Help the Aged, said: "This coalition between three very different organisations demonstrates the consensus that our pension system needs urgent reform. The Government’s Green Paper must take major positive steps towards creating the foundations of a more secure future for all."

Two demonstrations were held during the European Union summit in Copenhagen last weekend. NGO Global Roots and other activists arranged the demonstration.

According to reports, between 800 – 1,000 demonstrators from all over Europe participated under the heading, "United against the New World Order – we want a new world, a new democracy and new rights for everyone." One of the banners carried the slogan: "They call the EU a democracy – let's make a better one."

From their loudspeakers came slogans such as: "EU is a fortress – just like the fortress where the European leaders are hiding today behind barbed-wire!" and "The European leaders don't want to listen to us – they put an army in front to protect them selves!"

After the demonstrations, a spokesperson from Global Roots expressed satisfaction with the demonstration. "It was just as peaceful as we wanted it to be. We always knew that this demonstration would be a symbolic demonstration – especially because there are 1,000 police men in the area around the Bella Centre," he said.

On Sunday evening, the Danish police confirmed that 94 arrests had been made during demonstrations and other activities during the summit. The individuals were denied bail and imprisoned until December 23 charged with violence against the police.

However, after three days of activism, the co-ordinator of the demonstrations, workshops and exhibitions during the summit was satisfied with the nature of the activities, reports Berlingske Tidende. "There has been a really good teamwork between the individual organisations and every day around 1000 people have participated in our activities," said Sofie Krogh Andersen.

In a joint "Copenhagen declaration" adopted ahead of the Copenhagen Summit, participants from 20 European countries warned against the creation of a European superpower and criticised the EU approach to candidate countries in the accession talks. The declaration called for equal financing and equal access to media for the No and Yes camps in referenda related to EU issues. Members of the Danish June Movement handed the document to the Danish Minister for European affairs, Bertel Haarder ahead of the Copenhagen Summit.

The declaration pointed out that the European Union and its Convention on the future of Europe are on the wrong path, with their ambition of creating a European superpower with many features of a federal state. According to participants of the Alternative Copenhagen summit the EU regulated areas of explicit concern include the lack of democratic legitimacy and undermining of democratic nation states by the EU. "I hope the declaration will help to change the course of the EU and to mobilise the people of Europe," said Drude Dahlerup from the June Movement. NGOs backing the project also hope to initiate a broad European-wide campaign on the declaration.

Following is the text of the alternative Copenhagen Declaration

Copenhagen, 11.12.02

It is expected that the EU summit meeting in December 2002 will finalise the conditions for EU enlargement. This summit will therefore be an important opportunity to introduce more flexibility and freedom of choice for the Applicant countries as well as for the present Member States.

THE PREAMBLE OF THE COPENHAGEN DECLARATION:

We want a Europe of peoples and nations. The present EU is the project of economic and political elites. The future Europe should allow for flexible forms of co-operation in a Europe of democracies and diversity. It should allow for opt-outs and opt-ins in a flexible fashion, based on peoples’ choice. We demand that new European treaties should always be subject to referendums.

That is the background to this Copenhagen Declaration, which has been signed by individuals from a number of European countries who are concerned about the undemocratic direction of present EU development. This declaration is submitted to the EU Summit for consideration by the Heads of State and Government during the final negotiations on EU enlargement.

It is our hope, that these concerns and visions stressed out in the declaration will be taken into serious consideration by the presidency of EU and the leaders gathered in Copenhagen.

We hereby hand over The Copenhagen Declaration on a Europe of democracies and diversity and the signatures of all the people who have been making this declaration during the past days.

Yours sincerely,
Drude Dahlerup, Prof. of Political Science & Niels I. Meyer, Prof. of Physics

On behalf of the people signing the Copenhagen Declaration

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Agreed the 11th of December 2002

COPENHAGEN DECLARATION

FOR A EUROPE OF DEMOCRACIES AND DIVERSITY

We want a Europe of peoples and nations. The present EU is the project of economic and political elites. The future Europe should allow for flexible forms of co-operation in a Europe of democracies and diversity. It should allow for opt-outs and opt-ins in a flexible fashion, based on peoples’ choice. We demand that new European treaties should always be subject to referendums.

We believe that democracy despite its shortcomings is the best form of government.

Democracy means government of the people, by the people, for the people. Peoples and nations have the right to self-determination as set out in the United Nations Charter

No stable democracy can exist without representative government, critical public debate and free pluralist media. Democracy requires that elected political leaders are accountable to voters through such discussion and through public elections.

We believe that global solidarity is necessary to create a decent world without hunger, poverty, war and oppression. Respect for international law, human rights and the environment should be the main guarantee of world of peace and sustainable development.

A balanced United Nations should play an important role in establishing a fair and sustainable world.

The claim that administrative or economic efficiency requires limits to democratic openness, control and participation should be rejected. Undemocratic decision-making procedures are never truly efficient. If they were, the world might as well revert to absolute monarchy or dictatorship!

ALTERNATIVE VISIONS ARE NEEDED

The world as well as Europe has changed significantly during the past 50 years. The ideas that established the European Communities reflect the problems of the period after World War II and they do not correspond to contemporary understanding of democracy, civil rights and economic freedom. We need improved democratic standards and procedures. We need strengthened civil rights and improved policies to protect the environment.

We believe that the European Union and its Convention on the Future of Europe are on the wrong path, with their ambition of creating a European Superpower with many of the features of a Federal State. We also believe that the EU is treating the Applicant countries in an unworthy manner by misusing its overwhelming power to dictate to them the conditions of their participation in the enlargement of the EU, and allowing no real negotiation on the substantive terms of their adherence to it. There should be no imposition of double standards on the Applicant countries, for example regarding the free movement of goods and workers. It is no coincidence that the present process is named 'enlargement', that is, enlargement of the West, instead of unification or co-operation.

With the fall of the Berlin Wall in 1989 Europe was given a unique opportunity to create a new political and social order where all the peoples of Europe would be involved on equal terms in the development of their States through elected parliaments and participatory democracy and close contact with political representatives. That new political and social order could have given the highest priority to solidarity, environmental concerns and the peaceful solution of conflict.

Such a pan-European vision should have been built up at that time in a collaboration involving all democratic nations in Europe that respected human rights. All European nations should have participated on equal terms with the Member States of the EU in developing this new European co-operation. At the same time, the far richer EU could have emulated the American Marshall Aid programme after World War II to assist the economic development of Eastern and Central Europe.

Instead of this, EU economic support to Eastern and Central Europe is much lower per capita today than Marshall Aid was to post-World War II Europe. In addition the EU has introduced severe trade barriers as well as other obstacles to competitive goods from Eastern and Central Europe. Partly as a consequence of this, and the requirement of immediate implementation of EU over-regulated economic policies, the overall economic development in Eastern and Central Europe has stagnated or even deteriorated during the last decade for many of the countries concerned.

Some EU common policies, which at its inception were intended to provide security and stability for the peoples of Europe, have instead become a mechanism for distorting the market with particular destructive consequences for developing countries. The Eastern and Central European countries should not be pressed into the flawed mechanism of the Common Agricultural Policy.

EU policy in relation to Eastern and Central Europe has been shortsighted and unfair. The Applicant countries have not even been offered the same opt-outs and derogations as some of the present EU Member States, for example as regards participation in the Monetary Union or the defence dimension of the EU. The enlargement negotiations amount in reality to little more than unilateral dictates, whereby the Applicant countries have had to accept all the basic conditions imposed by the EU.

Instead of attempting to enforce a standardised uniformity on all of Europe within a Federal-style State structure in which the big EU Member States have leadership and political hegemony, the EU should have recognised that the true basis of a flourishing Europe is its cultural pluralism and diversity of values.

The EU is establishing a new Iron Curtain between those countries that are members of the club and those outside it. What is desirable is rather a new principle of democratic flexibility that allows for a variety of forms of co-operation within Europe and beyond. The difference between true international co-operation and merging Europe's existing States and nations into a Superstate or attempted super-nation is this: that the former allows for opt-outs and opt-ins as well as bilateral and multilateral co-operation, whereas the latter does not.

Changes of opt-ins and opt-outs must be possible. The right of self-determination of any nation according to the UN Charter must be guaranteed.

OUR PRINCIPAL CONCERNS REGARDING THE EU ARE:

1. THE LACK OF DEMOCRATIC LEGITIMACY OF THE EU
The growing gap between the EU institutions and the people of Europe and the loss of popular support for the EU is illustrated by the fact that on average only half the voters find it worthwhile to participate in elections to the EU Parliament, and by the result of some national referendums;

2. THE EU'S UNDERMINING OF DEMOCRATIC NATION STATES
The EU is undermining the democratic nation states, regions, communities and people. The EU is step by step removing powers of decision on important national issues from national governments and parliaments that are elected by and responsible to national electorates. This is a fundamental subversion of the democracy of Europe's states and nations.

3. THE PROMOTION OF SPURIOUS AND ARTIFICIAL 'EUROPEAN VALUES'
In spite of Europe’s cultural heritage the violent history of Europe gives us no right to claim that human rights or democratic concern, for instance, are especially characteristic of the European continent and the historical role of its dominant States around the world. This is while recognising Europe’s undoubted contribution to human culture. The attempt to boost particular values as 'European' contributes also to making unfavourable distinctions between true 'Europeans' and the many immigrant people who live within Europe's borders.

4. THE PREDOMINANT INFLUENCE OF BIG BUSINESS INTERESTS ON EU POLICY-MAKING
Powerful big business interests are too influential in EU policy-making and were the first advocates of such EU initiatives as the single market and the euro-currency. They are leading proponents of the EU’s thrust towards economic ultra-liberalisation and privatisation of public services, steps that have been pushed by such bodies as the European Round-Table of Industrialists and UNICE, in intimate interaction with the EU Commission. The narrow view of economic development as the main policy parameter is not reflecting the welfare of people in Europe;

5. THE GENDER IMBALANCE OF THE EU
Women's political citizenship is constrained by the fact that the decision-makers in the EU institutions are predominantly male. Moreover, the EU Convention on the Future of Europe is led by a group of elderly gentlemen and fewer than one-fifth of its members are women. This appointed Convention in no way mirrors the people of Europe.

6. THE LACK OF RESPECT FOR PEOPLES’ DECISIONS IN REFERENDA
There have been some cases where voters in EU Member States have rejected a proposed treaty in a referendum and where this rejection was subsequently manipulated into an acceptance in a further referendum.

PRINCIPLES FOR DEMOCRACIES AND DIVERSITY IN EUROPE

1. The future European co-operation should allow for opt-outs and opt-ins in a flexible fashion in a Europe of democracies and diversity. It should allow for the utmost bilateral and multilateral co-operation;

2. International or supranational regulation should only be introduced in problem areas that cannot be solved by individual States. It should be national parliaments or peoples alone that determine what powers should be exercised at international or supranational level;

3. In the future new European treaties should always be subject to referenda, and Governments and Parliaments should respect the decision of their peoples. The treaties should contain an exit clause.

4. It must be possible for the people to actively influence and shape the future of Europe from bottom up, therefore necessary instruments such as a right of initiative have to be installed at all levels.

PRINCIPLES FOR EU-RELATED REFERENDUMS

a) The referendum theme should be formulated and presented in a way acceptable to both parties. There should be equal financing and equal access to media for the No and Yes campaigns;

b) The campaigns should be monitored by independent observers;

c) The treaty being put to referendum should be translated into the national language and distributed for public debate at least half a year before a referendum;

d) EU institutions and foreign governments should not interfere in national referendums;

e) The people of the Applicant countries should have a free choice based on fair, adequate and pluralistic information.

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Signatures from participants at the Alternative Copenhagen Summit
December 2002