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Year 2005 No. 74, May 24, 2005 ARCHIVE HOME JBBOOKS SUBSCRIBE

No to Fraudulent "Solutions" to the Pensions Crisis! No to the Demand that Pensioners Be Forced to Fend for Themselves! The Right to a Decent Pension Must Be Guaranteed!

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No to Fraudulent "Solutions" to the Pensions Crisis! No to the Demand that Pensioners Be Forced to Fend for Themselves! The Right to a Decent Pension Must Be Guaranteed!

Who Is Adair Turner?

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No to Fraudulent "Solutions" to the Pensions Crisis! No to the Demand that Pensioners Be Forced to Fend for Themselves! The Right to a Decent Pension Must Be Guaranteed!

On May 13, Adair Turner, chair of Britain's Pension Commission which has been tasked by the government with investigating the pensions crisis and coming forward with recommendations on how to solve it, delivered a major speech to the annual conference of the National Association of Pension Funds (NAPF). In this speech, he presented a progress report on the work of the commission to date, pointed out that the Commission intended to publish its final report by the end of November this year and outlined the main strands in which its thinking is developing. In doing so, he made it clear that the Commission has not deviated from the its politically motivated approach to the pensions crisis in Britain, which was apparent in its interim report published in October 2004, and which is aimed at upholding monopoly right over the public good.

At no point throughout his speech did Adair Turner recognise the right of retired workers and pensioners to a livelihood nor the responsibility of society, through its representative the state, to provide them with this. On the contrary he insisted on the idea that the issue of a pensioner's income is down to the individual who should fend for themselves, declaring that there is a "decreasing willingness on the part of employers to … be in the pensions provision business". Further on, he continued, "the public sector as an employer should not be making, at the expense of future tax payers, promises to today's 25 years old new employees, to pay pensions of a certain value at a certain age independent of whatever happens to life expectancy" and "we are increasingly convinced that long-term pre-retirement longevity risk … should be shifted to individuals". Further muddying the waters around the issue, he continued: "Affordability and intergenerational equity both argue for shifting the long term longevity risk to individuals."

On the basis of this reasoning, Adair Turner reiterates the "three unavoidable choices" first mentioned ion the Commission's interim report, "pay more taxes, save more or retire later". This is the inevitable consequence of an approach to Britain's pension crisis which is rooted in a 19th century doctrine that the welfare of a pensioner after their working life is finished is their own individual problem and they should simply fend for themselves. It represents a definite rejection of the social democratic arrangements which were put in place at the end of the Second World War, according to which society had a responsibility for the welfare of its members from the "cradle to the grave".

The problems of the pensions system in Britain cannot be sorted out on the basis of unscientific ideas about affordability, intergenerational equity and employers not being in the pensions provision business. They can be sorted out by first and foremost recognising the claim of pensioners on society for a livelihood as legitimate and just, which reflects the socialised nature of production in society and the fact that all are dependent on this for their existence. The idea that at the end of your working life you should be thrown out to fend for yourself as best you can is quite simply barbaric. Once the right of pensioners to a livelihood is recognised, the question of how to fund it can be addressed by looking at the value of the country's total social product and the competing claims for consumption on it. There is no particular reason why the claim of PFI monopolies for their 40 and 50 year contracts to be honoured should take precedence over the claims of the pensioners for an adequate pension. The social product is created by the labour of the workers at the point of production and this is then seized by the monopolies who share it out amongst themselves in the form of interest and dividend payments and huge salaries and bonuses. It is perfectly reasonable to demand that a portion of this wealth be handed over to the state to fund an adequate pension for all pensioners.

Practically at the same time that Adair Turner was giving his speech, the new Work and Pensions Secretary, David Blunkett, was warning workers that they can no longer expect to "hang up their boots" when they reach 65. A few days later, the government announced in the Queen’s Speech that "long-term reform" in the shape of a draft pensions bill would be introduced in the coming session of Parliament, and its detail is expected to be largely dependent on the report of Adair Turner’s Commission. This is taken to mean legislation for compulsory savings towards a pension and/or raising the retirement age and/or increasing National Insurance contributions. The argument is given that because of an ageing population, the ratio of workers to pensioners must be brought back into balance.

All this "reasonable" argument and David Blunkett’s promise to try and reach a "consensus" on the pensions problem studiously avoids the real causes of the crisis. The crisis connected with the neo-liberal agenda which attacks the right of workers to participate in social production in a stable economic environment, and the specific scandal of the theft of workers’ occupational pensions by the monopolies, have led to the situation where both business and government are absolving themselves of the responsibility to guarantee the right to a decent pension. The workers themselves are then blamed for not themselves making provision, when the crime is that the private ownership of the means of production is robbing working people of the social product they give rise to. The increasingly parasitic nature of the economy as well as the super-exploitation of workers throughout the globe are factors which contribute to the exacerbation of the pensions crisis. When it comes to providing for the social needs of the population as a whole, the government can be relied on to spew out spurious arguments to avoid the issue, and to follow the path of demanding that the workers concede to the prior claims of the monopolies, and not the other way round. While demanding that the working people are the ones who should provide a pool of funds with which the monopolies can play fast and loose, the government and the representatives of big business and finance like Adair Turner will do anything but demand that the monopolies be socially responsible.

Adair Turner's speech to the NAPF conference is a signal that the onslaught against the pension rights of the working class and people is bound to intensify in this third term of the Labour government. The working class and people must get organised to defeat this attack and to fight to defend their pensions and hold the monopolies and the government to account that they must neither destroy the means of production nor opt out of their obligation to provide pensions which guarantee a decent standard of living for those who reach retirement age.

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Who Is Adair Turner?

Adair Turneris a representative of the British financial oligarchy. He is currently vice chairman of Merrill Lynch Europe, a director of United Business Media plc, chair of the UK Low Pay Commission and chair of the UK Pensions Commission. He is also a visiting professor at the London School of Economics and CASS Business School, City of London.

He worked for British Petroleum and Chase Manhattan Bank before joining McKinsey & Company in 1982. He became a partner in 1988 and a director in 1994. During his time at McKinsey, he built the firm¹s Eastern European practice, opening offices in Moscow, Warsaw and Prague. From 1995 to 1999 he was Director General of the Confederation of British Industry.

He is a trustee of the World Wide Fund for Nature and a member of the Council of Management of the National Institute of Economic and Social Research (NIESR). He was also a member of the Prime Minister's Panel of Independent Strategic Advisors from 2001 to 2002 where he focused on health service issues.

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