The Great Pension Robbery
Wednesday 30th November 2011 saw the largest set of co-ordinated industrial action by trade unions in a generation over the Government’s proposals to change public sector pension schemes on the basis that the public purse can no longer afford them.
In the past pensions have not been burning issues for members of black communities who have been struggling against racism. This has partly been because the number of black workers in the UK black community at pensionable age has been relatively small and for younger workers the need to plan financial security in their old age is not at the forefront of their minds. However a recent report by the Runnymede Trust demonstrated that this is rapidly changing and forecastedan increase in the number of Black people over 65 (in England and Wales) from 230,000 in 2001 to 2.7 million by 2051. More recently however debates at the TUC Black Workers’ Conference and increased involvement of black workers in the recent industrial action show that this is becoming an important issue.
This interest is not just because a larger proportion of the black population are getting older, but also because in the public sector where significant numbers of Black workers have gained employment the public sector pension schemes paid into over the length of their working lives are now under attack.
The current attack on pensions is nothing new. Back in the 1980s Margaret Thatcher’s Government, keen to help their friends in the city develop a financial services industry, went on a charm offensive to persuade public sector workers to move their pensions from secure final salary schemes to personal pension plans. What they didn’t say was that a personal pension plan costs lot more because of administration cost and that the value of your final pension would be dictated by how well the stock market was doing at the point of retirement. They also failed to warn those that left pension schemes that the sales patter fed them by banks and insurance agents that they would get a better pension on retirement was lies. Unsurprisingly by the end of the 1990s it was discovered that thousands of public sector employees had been mis-sold personal pension plans. Many firms that were involved in this scam went out of business to avoid having to pay compensation to the victims and it was left to the taxpayer in the form of the Financial Services Compensation Scheme to pick up the tab.
Attacks on private sector defined benefit (final salary or career average) schemes came in the 1990s when employers decided that they would prefer not just to take pension holidays by not paying the employer’s contribution into company pension schemes, but not have schemes at all and force workers, at least those that could afford it, to rely on personal pension plans bought from financial services companies, unless of course you were a top executive. This little trick was accomplished by asking financial actuaries in the city to change the way that they calculated the long term values of pension funds investments. The calculation was changed to calculate the risk of the funds over a much shorter period and based on investment values just after there had been stock market crash.
Not surprisingly the result was that what had been once financially viable pension funds were found to have large pension gaps as the assets in the schemes were drastically downgraded and liabilities increased. This of course provided employers with the excuse to either close pension final salary pension schemes to new employers or close them down completely thus devastating pension provision for ordinary workers in the private sector.
With pension provision in the private sector devastated the current Government has turned its attention to the public sector where workers are accused of having the benefit of gold plated pension schemes. This is despite the fact that roughly half of public service pensioners receive less than £5,600 a year. Recent changes to the public sector pension schemes since the coalition Government came into power mean that those in public services are already paying a 3% increase in their contributions and seeing the value of their pensions drop because index rating of pensions has been moved from the retail price index to the consumer price index, which will mean smaller annual pension rises.
This means that members in public services are already paying more for less, but the Government is not stopping there. Future proposals for changes to the schemes include:
- Increased contributions – by 50% or more
- Raised Retirement Age – to 66 for those over 42, 67 for those between 34 and 42 and to 68 for those under 34
- Replacement of final salary schemes with career average – less money for our retirement
These changes are likely to make being in the pension scheme, if you work for public services, prohibitively expensive and result in many current workers opting out of their current pension schemes and future workers not joining the schemes.
Public sector unions are quite rightly vigorously campaigning against this outrageous robbery. Pensions are deferred payment for old age in terms of the workers’ contribution and the employer’s contribution. The fact that the Government believes like their friends in the private sector that they are entitled to renege on schemes that workers rely on for their retirement is outrageous.
For the Black community the context for the current attacks on public sector pensions is one in which many Black people endure pensioner poverty and where the number of older Black people is growing rapidly. Runnymede’s recent report, Ready for Retirement?, shows that people from all Black backgrounds are more likely to experience pensioner poverty than the wider population. Statistics from the Department for Work and Pensions (DWP) show that half of older Pakistani and Bangladeshi people live in poverty, as do almost a third of Indians and African Caribbean’s, in comparison to one in six older people overall. Black people are also more likely to experience poverty before retirement. For example, 65 per cent of Bangladeshi people live in poverty, compared to 20 per cent of white people (DWP figures). There is, therefore, huge risk that many in the growing population of older Black people will have insufficient income to maintain a decent standard of living.
Many young black workers who work in the service industries such as finance, media, IT or the arts and don’t understand the importance of pensions do not have access to a decent occupational pension scheme. Many others who work for agencies, in call centres or doing temporary work are not covered by occupational pension schemes. For women, not having access to an occupational pension scheme to supplement their state pension is disastrous. They already suffer because of career breaks to raise children and make up an overwhelming proportion of those that work part time. Recent research revealed that women lose out both ways as they often fail to pay enough contributions to receive a full state old age pension. As a result 16% of newly retired women have a full basic state pension as against 78% men.
Luckily many black workers are relatively young compared to the population as a whole with 32.39 per cent in the 22-44 age group and 15.18 per cent in the 45-64 age group. This means that the spectre of mass pensioner poverty in black communities is some way off. However in 20 – 30 years there will be a tenfold increase in numbers of pensioners in the black communities and if we do not wake up to the realities of old age then our communities will be heading for a disaster. Those that believe that culturally we will be alright because younger relatives will look after us, or that they will go back home where it’s cheaper to live are deluding themselves. If we are to avoid the scenario of black pensioners dying because they haven’t got enough money to keep their houses warm or eat decent meals then action is needed now.
It is not an issue that can be left to others outside our community to campaign on. If we want to rectify the historic disadvantage that is faced by black pensioners, have access to decent occupational pensions and ensure that there is an adequate basic pension provision for our retirement then we have wake up to this issue now. We need to educate communities about pension issues, get involved in the union campaigns and industrial action to defend public sector pensions and fight to secure occupational pensions for all. This is not a choice, we can’t afford not to.
Apprenticeships For All
A major outcome of Thatcher’ introduction of neo-liberalism into the British economy in the early 1980′s was the sharp rise in unemployment especially among young people. In areas that saw the collapse of old industries such as mining, textiles, steel, car manufacture and ship building, the young people of the time saw their futures consigned to the dole. They represented a whole generation of young people that were never to work and who make up the core of today’s long term unemployed. In Black communities where gaining employment had always been a problem the unemployment rates for young people spiralled to over 50% and arguably laid the foundations for the uprisings across every major city in 1981.
The Government response at this time was to come up with training programmes to prepare young people to work. The most famous of these was the Youth Opportunities Programme (YOPS) which was run by the Manpower Service Commission. It was designed to offer 12 months training and aimed at school leavers, but was notorious as a cheap labour scheme where participants got little useful training and no chance of a permanent job at the end unless they were part of a trade union negotiated scheme.
Thirty years on the 2008-09 recessions saw unemployment rise to 2.5million, with far higher numbers finding themselves out of work. This exacerbated the situation in black communities where high levels of worklessness already existed and where for young people, gaining access to work was already a problem. A report published by the institute of Public Policy Research in January 2010 showed that almost half (48%) of Black people aged between16-24 were unemployed – compared to the rate of unemployment among white young people which stood at 20% and the recent rise in youth unemployment to over a million means that the situation for young black people is getting worse.
In February 2011 the Coalition Government Minister John Hayes announced that the Government would ‘increase the budget for Apprenticeships to over £1,400 million in 2011-12, helping to create a new generation of skilled workers to drive economic growth’. This increase is an extension to current Government apprenticeship schemes that are coordinated by the National Apprenticeship Service (NAS) and the money is aimed at creating 100,000 extra apprenticeships by 2014.
However, the TUC have had a long standing concern about the difficulties young black workers face gaining access to both employment and decent quality government training schemes. As far back as 1984 in its report ‘Moving On’, the TUC highlighted concerns that the welfare to work New Deal Programme had poorer outcomes for young black workers. In 2005, through its ‘Workplace Training – a Race for Opportunity’ the TUC called on the Government to use public procurement as a lever to improve the employment of black workers and to boost training, apprenticeships and skills levels.
The previous government acknowledged the lack of involvement of young black workers in apprenticeships and put in place plans to commission a number of diversity pilots that would run over a period of four years designed to improve participation in apprenticeships. The current Government has put in place the diversity pilots but has only funded the programme for a year so far with the possibility of a further 12 months funding.
The TUC, in highlighting the need for urgent action to ensure black workers do not disproportionately continue to miss out on the benefits that apprenticeships can offer, are working to highlight three main issues which are:
- The need for comprehensive monitoring systems to enable the National Apprenticeship Service and the Government to assess how their strategy on increasing diversity in apprenticeships is working;
- The need to ensure that black workers gain access to good quality apprenticeships and that mechanisms are put in place to ensure that discrimination by employers is tackled so that they are able to obtain workplace placements;
- The need to ensure that young black women are able to access the full range of apprenticeships and do not suffer labour market segmentation in relation to access to training on the basis of their gender; and
- The need to focus on outcomes as well as apprenticeship starts to ensure that black apprentices graduate to full time jobs or higher learning.
In order to highlight these issues the TUC held a joint half day conference at Congress House on 6 September 2011 called ‘Apprenticeships for All’, which was organised as a joint event between the TUC, Versa Professional Services Ltd, Unionlearn and SERTUC. It was aimed at union activists and negotiators, learning reps, equality reps, black activists and employers
Without strong union intervention at workplace and public policy level it is likely that young black workers will not only miss out on the expansion in apprenticeships, but that where they do get apprenticeships find themselves just as many in their parents’ generation, engaged with schemes that are short term, low quality and that do not lead to training progression or to a decent job.
UK Government Dumps on Domestic Workers
The re-emergence of domestic work as a growing area of employment in Europe over the last few years reflects a general growth in the use of workers in a domestic setting and the blurring of the line between state provided social care in domestic settings and the private social care market. The consequence of this has been a growth in the amount of domestic workers, many of whom are women, recruited predominately from the Philippines, Africa and South America.
Many of these women work in conditions that can be described as a contemporary form of slavery where:
- Domestic work is not recognised as proper work recognise domestic work as proper work,
- There is inadequate legal protection for workers in private households, which is aggravated by the fact that private households as well as domestic workers are not easily accessible to trade unions; and
- Domestic work is not recognised as an immigration category although large numbers of domestic workers are migrants.
The isolated, dependant and unregulated nature of working in private households, combined with gender-based and racial discrimination means that domestic workers are vulnerable to exploitative practices. They can face physical, psychological and sexual abuse, discrimination, low pay and long hours. Employers often use passport retention as a means of control.
In the UK Domestic workers have organised themselves through Kalayaan, a registered charity established in 1987 to provide advice, advocacy and support services in the UK for migrant domestic workers. Domestic workers have active in Kalayann have created a campaign called Justice 4 Domestic Workers which is supported by Unite to campaign for rights for domestic workers. They successfully campaigned for the introduction of protections in the migrant worker visa including crucially the right to change employer which as a result allowed domestic workers to leave abusive employers and not find themselves classed as undocumented workers.
In the last two years Justice 4 Domestic Workers (J4DW) has run a vigorous campaign against domestic slavery among diplomatic overseas staff. The campaign has been backed up by a report produced by Kalayaan which showed that based on its case studies, 64% of diplomatic domestic staff work a seven day week, 57% receives £50 per week or less, and 50% work 16 hour days. In addition, 65% have their passports taken away from them and held by their employer. 58% reported they had been bullied or psychologically abused. The campaign is calling on the Government to extend the protections of the migrant domestic worker visa, most vitally the right to change employer, to cover migrant domestic workers brought to the UK by diplomats. The previous immigration minister Phil Woolas made an ‘in principle’ agreement to change the system and admitted that ‘there is no question that we are putting those diplomatic relations above the interest of victims’.
The current Coalition Government however has shown a callous disregard for the vulnerability and lack of right and access to justice of domestic workers. In their headlong flight to reduce immigration by banning non EU migrants from Britain they are attempting to roll back the progress that has been made by domestic workers. On 9 June 2011 Damian Green, Immigration Minister announced a new three month consultation on employment-related settlement. In this consultation are proposals to remove fundamental safeguards designed to protect migrant domestic workers. If implemented these proposals would lead to a return to forced labour and slavery by abolishing the route for overseas domestic workers in private households altogether or for a maximum of 6 months as a visitor only, or 12 months where accompanying a Tier 1 or Tier 2 migrant, with no possibility of extension, no right to change employer, no ability to sponsor dependants, no rights for dependants to work in the UK, and no right to settlement. These changes if implemented would amount to a return to bonded labour. Abolishing or time limiting the domestic workers visa would not stop migrant domestic workers from being brought to Britain and encourage an increase in trafficking via illegal routes and unlawful working.
Shamefully moves by the coalition Government to roll back rights for domestic workers are not confined to the UK. J4DW and domestic Workers worldwide have been fighting for an International labour Organisation Convention to establish basic rights for domestic workers. The proposed convention was finally discussed and adopted at the International labour Congress annual conference in June 2011. The ILO’s 183 member states need to ratify and implement it. But it was a triumph nonetheless that governments, employers and unions from around the world managed over a fortnight last year and a further fortnight this year, plus all the discussions in between, to agree a text, voted for by 396 delegates, with only 16 against and 63 abstentions. Disgracefully delegates had to listen to two contrary voices - the representatives of the British government and of the Confederation of British Industry calling for abstention and opposition respectively. Such action exposes the hypocrisy of a government who claims they are committed to reaching the Millennium Development Goals, not it appears if it involves giving rights non-white women workers. Brendan Barber the TUC General Secretary said ‘I am appalled that the CBI voted against the convention and that the British government abstained. The votes show that employers and governments around the world disagreed with their lack of compassion – they are thoroughly isolated and should be ashamed of their position’.
The campaign for these workers continues and needs our help. The campaign for UK ratification of the ILO treaty on Domestic Work starts now. The TUC is setting up a campaign for ratification, in alliance with Justice 4 Domestic Workers, Anti-Slavery International, Christian Aid and Oxfam, and more will be welcome.