Thursday, August 04, 2011

Pay freeze for workers and less in pensions

Only a quarter of workers in the UK have had a pay rise so far this year, the Chartered Institute for Personnel and Development (CIPD) has said.

Four out of five public servants said they had not received a pay increase. A small number of local authorities have gone further and have tried to impose pay cuts on their staff. Shropshire council sent letters to all its 6,500 employees, stating they would all be sacked on 30 September but immediately rehired, although with a 5.4% pay cut. Kettering General Hospital NHS Foundation Trust said it would ask all staff to accept a pay cut worth half a day's pay per month.
Charles Cotton of the CIPD said: "Even those who are lucky enough to get an increase in their pay will find it below the current cost of living, compounding consumer belt-tightening."

Meanwhile, the attacks on workers pensions continues to bear fruit for the bosses.

A firm of actuaries has warned many workers may discover that they cannot afford to retire. It points out that very few big employers now offer a traditional final-salary pension scheme for new recruits. Increasing numbers have been shutting them even to current staff. LCP says. "In the short term, this may help the companies' finances but, in the longer term, many people could find that they simply cannot afford to retire."

Its report also says UK employers will save £73bn as a result of some adopting the consumer prices index (CPI) rather than the retail prices index (RPI) to protect pensions from inflation. But this will solely benefit employers rather than their staff. In the past year, BT has saved £3.5bn, BA £770m, BAE Systems £348m and Tesco £270m. LCP said. "Of course, where companies are seeing a significant reduction in their obligations to current and former employees, pension scheme members are losing out through lower expected future benefits," LCP points out. "If CPI were to average 0.75% per annum less than RPI, a pensioner retiring at age 60 on £10,000 per annum would see their benefit eroded by nearly £1,200 pa in today's terms by the time they reach age 75. The difference is even greater for a deferred pensioner whose pension has yet to come into payment; a 45 year old expecting RPI linkage up to retirement and in payment could lose around a quarter of the value of their pension," the report adds.

The fact priority has to be given to company profits at the expense of the living standards of working people is confirmation that capitalism is a system that does not work in the interest of the wealth-creating majority, only in that of the profit-taking minority. We have to live with that but it doesn’t mean we have to take it lying down. The actual exact cuts in our living standards is not something the government can decree. It depends on how determinedly we resist. In other words, on the class struggle. But, since the cards under capitalism are always stacked against us, this will only be a defensive, rearguard action at most to stop things getting worse. Yet another reason why we should be organising, not just to limit the damage, but to put an end to capitalism itself.

No comments: