A
charity points out the effects of capitalism in the UK on working
until you drop . Charities, will be unnecessary in a socialist
society, are always calling for more government action, or asking for
more money to be thrown at a particular problem, which in itself is
caused by capitalism, are merely seeking sticking plaster solutions
on open wound issues. There’s only one solution to society’s ills
-socialism.
You're never too old, or too young, to fight for socialism.
‘Our
analysis shows that, each year, over 92,000 adults die before they
can draw their pension. This figure will rise by thousands for every
year the pension age increases. That means thousands more dying
people and their families will lose out on this crucial benefit. The
poorest in our society and those living in areas with low life
expectancy and high working age poverty will be most badly affected.
Nobody should die in poverty, and we are calling for change.
For
each year the pension age is increased, thousands more people will
die without being able to access their pension.
In
2022, 1 in 7 deaths (14%) in the UK were of adults who died before
they were able to access their pension at the age of 66 (excluding
those who died from causes such as poisoning, injury, accidents or
related to pregnancy and birth), equating to 92,000 people. State
Pension age is due to rise to 67 in 2026/7, which will lead to an
extra 7,700 individuals dying before receiving any of their pension.
With
an increase to age 68, as currently proposed to happen between 2041
and 2043, an extra 15,800 people per year compared to today would be
denied their pension before they died. This would equate to 108,000
people each year.’
https://www.mariecurie.org.uk/blog/rising-state-pension-age-poverty/383583
The
below is from the Socialist
Standard August 2002
‘The
class war, between the owners of the means of production (the
capitalists) and those compelled by threat of poverty to sell their
capacity to work (the workers) is an essential and continual feature
of capitalist society. Romantic notions of class struggle – of
rowdy mass meetings, strikes, battles on the barricades –
concentrate on the exceptional forms, rather than the
brain-throttlingly dull reality of the class struggle of every day
life. In this category we can place things as seemingly dull and
complex as retirement pensions.
Pensions
account for a massive proportion of economic activity in the UK.
According to the Office of National Statistics self-administered
pension funds (funds set up by employers to pay occupational
pensions, or private pension schemes) had a market value of £765
billion in 2000, paying out a total of £29 billion in benefits in
the same year. Between them they account for some £300 billion-worth
of shares in businesses, giving them considerable voting power in
publicly quoted companies. This is alongside the £38 billion paid
out by the government in state retirement pensions.
All
capitalists now?
This
concentrated ownership through pension funds has led some
commentators to claim there has been a fundamental change in the
basis of society. It’s not just overt pro-capitalists who look at
things this way. Many leftists have seen controlling pension
investments as a way of bringing the economy under social control.
Indeed, the Labour government still see encouraging pension schemes
to invest in riskier long-term venture capital projects as a way of
overcoming the British productivity gap.
Funded
pension schemes operate by investing the money paid in by or for
scheme members on the stock exchange, and paying pensions from
dividend income to those members who have contributed enough. Through
the investment decisions of the pension trustees, the commentators
maintain, the pensioners have control of vast investments. Thus,
workers, they claim, must own part of the means of production, and
have a vested interest in receiving a share of the profits. They
would point out that in 1996 57 percent of pensioners reported to be
receiving income from such occupational pension schemes.
The
changes made by pension funds, though, are largely illusory. For
starters, “an individual’s stake in an occupational pension
scheme cannot be ‘cashed-in’” (Social Trends 2002, ONS,
p.102), i.e., the pensioners do not own the capital of the pension
funds. Coupled with this is the fact that the pension fund trustees
are bound by strict legal guidelines regarding the manner of their
investment: their first duty is to invest to maximise the
profitability of the funds. That is, via their control of the state,
the capitalist class exercise a form of collective control over the
pension funds to ensure that their investment decisions are aimed at
maximising their income from profits. Finally, even though 57 percent
of pensioners receive an occupational pension, this accounts for only
27 percent of their total income. In other words, most workers do not
earn enough to pay for a pension that will entirely support them on
retirement.
From
a Marxian perspective huge pension funds still mean capitalism as per
usual. The need for pensions arises from the fact that as workers get
older, they become less able to work, and become surplus to the
requirements of capital. Those workers have spent their lives selling
their capacity to work, in return for a wage which represented the
cost of maintaining and reproducing their capacity to go on doing
that work. If they cannot work, they have no other means of securing
their means of living. Since the capitalists do not want to hire
them, and workers are unwilling to work until they drop, the
capitalist class has to pay out to keep workers alive upon
retirement. So in this sense pensions reflect the existence to the
class struggle.
As
pension payments are a huge burden on them the capitalist class have
an interest in ensuring that the pensions paid out do not get too out
of hand. The capitalists at the sharp end of wage negotiations are
well aware of this, as Larry Elliott noted in his Guardian column,
when discussing TUC plans to make it compulsory for employers to make
full occupational pension contributions. This, he wrote, “would
eventually be paid for by workers through lower wages”. (Guardian,
24 June). That is, pensions are effectively deferred wages, with
employers weighing their expected contribution to the pension fund
off against current wages laid out (in the 1970s, this calculation
was used as a way of circumventing wage restraints via reducing
immediate employee contributions or just raising future pensions).
Maximising
profits
Capital
is always seeking to maximise the profits made from pension funds. In
2000 pension funds paid £3 billion in commission to stockbrokers
alone, and paid £329 million in tax. As can be seen from the pension
mis-selling scandal, there is plenty of incentive there for private
pension funds to want to attract investors, to the extent of
fraudulently persuading people to invest. The size of their
repayment, £12 billion, indicates the scale of the scandal and the
amounts they stood to gain from it.
As
the TUC point out in their document Pensions in Peril: the Decline of
the Final Salary Pension
(http://www.tuc.org.uk/pensions/tuc-4672-f0.pdf), Inland Revenue
statistics indicate that employers have netted a sum of £19 billion
through reducing pension contributions or taking contribution
holidays on the back of the surpluses in the pension funds between
1988 and 2000. That is, they pocketed profits from the pension funds
by the back door, using the revenue they generated to cut the amount
of money they need to pay to wages out of current receipts. By way of
contrast, over the same period the workers only got back some £10
billion out of the surplus by way of reduced contributions and
increased benefits.
Of
course, these are just the legal ways that capitalists seek to gain
from pension funds. As has been seen over the years, pension fund
present a fabulous opportunity for fraud and chicanery on the part of
our masters. Robert Maxwell famously stole £400 million from
the Mirror group’s pension fund. “I own the
pension scheme,” he declared, and proceeded to use its wealth to
prop up his empire. This resulted in substantial changes to the law,
including preventing pension funds from investing more than 5 percent
of its funds in the employers’ companies.
Of
course, it’s not just private employers who try to plunder these
shimmering hordes of money. When the bus companies were privatised in
1986 in England, the state withheld £300 million from their pension
schemes, and a further £250 million in Scotland. It took until last
year, through countless legal wrangles, to get the money back, and
even then the treasury held on to £100 million of the money from
Scotland.
Due
to burgeoning costs, employers are currently scaling back drastically
the number of final salary (or defined benefit) pension schemes, that
is, pensions where the final annuity is guaranteed as a proportion of
the employee’s final salary by the employer. That is, the onus is
on them to make up any shortfall in receipts from the fund and pay
the pension. This is as opposed to defined contribution pensions,
wherein returns are not guaranteed and will only apply according to
the sums invested, as with any other personal pension. This exposes
the pensioners to the full market risk of investing in the stock
market casino. According to the TUC, there were 5.6 million workers
on defined benefit schemes in 1991, and this is projected to have
fallen to 3.8 million in 2001. This change in pension terms means a
fall in employer contributions (defined contribution schemes are
cheaper for them) and exposes them to less risk.
Whilst
many point to changing demographics – with an increasingly ageing
population in Western countries – as a key reason for the pensions
problem, there are several other factors impelling capitalists to try
and cut back on their pension costs and liabilities. As we have seen
recently, one is the problem of a falling stock exchange.
Declining
value
Between
1999 and 2000 pension funds’ total value fell from £812 to £765
billion. Contributions from employees and employers remained
relatively stable over that period, but the value of shares held by
the pension funds fell from £353 billion to £295 billion. This had
the knock-on effect of reducing income from dividends – in 2001
dividend receipts fell from £13.02 billion for the previous year to
£11.85 billion. According to the Guardian (2 July), over
three-quarters of local authorities have deficits in their pension
schemes, some of which will be compelled to increase council taxes to
cover the cost.
On
top of this, changes in corporate accounting, some which were
inspired by the ongoing problem of transparency over pensions, mean
that companies must quote their potential pension liabilities in
their accounts, making them less potentially attractive to investors
as they weigh against current profits. When British Airways changed
to a defined contribution pension scheme their chief financial
officer is quoted as having said that “the change to a defined
contribution pension arrangement for future new UK staff is a
measured and necessary response to the competitive environment in
which British Airways operates”. That is, the competition for
investment and profits between capitalists.
Given
the scale of the problem, it’s no wonder that pensions are becoming
an increasingly large political issue. Several trade unions, mostly
noted for their quiescence over most matters, are actually
threatening strike action over pension funds – largely since a
great deal of the importance of unions lies in their role of
negotiating and guarding employees pensions. The Tories, likewise,
have begun to harangue the government over pensions, trying to win
over workers’ votes by being the party of prudent finance and
protectors of pensions.
The
government themselves are still recovering from the outrage caused by
their pensions increase of 75p in April 2000, and are currently
trying to make up for it by providing a series of means-tested
benefits. That is, rather than give extra income to pensioners, they
guarantee to pay directly for certain items (e.g. winter fuel), with
lots of strings attached. Currently, with the ongoing goal of
reducing the size of the state sector in mind, the government aims to
have 60 percent of pensioners on personal pensions rather than state
pensions, moving risk to individuals and moving more money from the
current consumption through taxes onto investment and accumulation on
the market.
By
moving more pensions to the personal and occupational sector, the
government will be transferring dependence over to people’s
employers and direct wage packets, thus increasing the level of
market discipline on the labour force. That is, it is part of the
continuing function of the state to impose the wages system on the
majority of people and maintain its existence both in terms of
physical maintenance of the system and providing its ideology.
There
has always been strong ideological side to the pensions system. The
Tories, for instance, favour private pensions and individual savings
because it promotes the consciousness of personal responsibility and
property (and also has the fringe benefit of moving some of the
administration costs of pensions off onto the commons of peoples’
free time). Labour, however, historically said it believed in the
state pension as a means of generating a sense of social belonging
and responsibility.
These,
of course, also relate to the different interests between different
forms of capitalist appropriation of surplus value and the interests
of different sections of the capitalist class. That is, the Tories’
friends in the City of London versus the labour intensive industries
backing Labour.
For
workers, the struggle is not only over the size of pensions, but over
identity, security and, ultimately, working conditions too. The
pensions problem within capitalism once more proves the market
economy’s incapacity to go beyond the limits of the wages system,
and adequately provide for the needs of those who have worked all
their lives. As the capitalist class endeavours to encourage us to
share their interests, we find our lives opened up to the chaos and
insanity of the stock market casino. But the market system cannot
provide any security for us in the long run, which is why we need to
turn the class struggle on the economic front into a fight for a
society based upon the direct satisfaction of needs.’
Pik
Smeet
https://socialiststandardmyspace.blogspot.com/2023/08/pensions-pay-and-poverty-2002.html
