Broadening the Battlelines

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Broadening

The pensions struggle—a fight for public services and trade union organisation

A Communist Party pamphlet

the battle lines

by Bill Greenshields

'The government has launched a general political attack on the working class. The unions have responded with limited industrial action. While we have seen great demonstrations of resistance, this approach on its own does not and will not meet the challenges faced by the working class and the trade union movement. Now the trade union movement has to consider the future'.

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Published by the Communist Party January 2012 ISBN 978-1-908315-07-6 Britain’s Road

to Socialism The new edition of Britain;’s Road to Socialism, the Communist Party’s pro-gramme, adopted in July 2011; presents and analysis of capitalism and imperial-ism in its current form; answers the questions of how a revolutionary trans-formation might be bought about in 21st Century Britain; and what a socialist and communist society in Britain might look like. The BRS was first published in 1951 af-ter nearly six years of discussion and debate across the CP, labour movement and working class. Over its 8 editions it has sold more than a million copies in Britain and helped to shape and develop the struggle of the working class for more than half a century. Other previ-ous editions of the BRS have been pub-lished in 1952, 1958, 1968, 1977, 1989 and 2000 as well as multiple substantially revised versions in between.

Broadening the Battle Lines 1

The pensions struggle – a fight for public services and trade union organisation

The ConDem regime’s strategic attack 2

Broadening the Battle Lines The pensions struggle—a fight for

public services and trade union organisation

by Bill Greenshields

CONTENTS

page

The erosion of private sector pensions 5 The European dimension 4

The public sector pensions campaign 6

Broadening the battle lines—a strategy to win 10 Negotiations, unity and ‘divide and rule 7

Communist Party www.communist-party.org.uk

The next steps 13 Promoting political understanding 15

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The ConDem regime’s strategic attack

The assault on pensions is not a response to people's increased longevity, problems of 'affordability' and deficit reduction as presented by the ConDem government. It is a central part of a strategy to achieve three key objectives: very large scale privatisation of public services, including across education and in the NHS; the transfer of large public sector funds into the private insurance and finance industry; and the destruction of the high levels of trade union membership in the public sector. It is the battlefield that the government have selected in their class war on everything that workers and their families have won from the capitalist system in Britain over the past 60 years. It is part of the general ruling class attack on workers here in Britain and throughout the so-called 'free market' world, orchestrated in Europe by the European Union at the behest of its member states. The British government believes that public sector pension schemes and high levels of trade union organisation are disincentives to private transnational monopolies taking over public services. The old public sector pension scheme and trade union determination to defend it are the main factors behind the delay in Royal Mail privatisation. As Treasury Secretary Danny Alexander told the House of Commons on December 20th, "The new pensions will be substantially more affordable to alternative providers... by offering transferred staff the right to remain members of the public service scheme, we are no longer requiring private, voluntary and social enterprise providers to take on the risks of defined benefit that deter many from bidding for contracts in the first place." Therefore, the government concludes, the destruction of these 'disincentives' is a political priority. But as trade unions fight to defend their current schemes, it should be noted that this is not a struggle to defend some 'golden age' of pensions. Far from public service workers enjoying 'gilt-edged' pensions, as the ConDem government and right-wing media would have people believe, the general picture is one of inadequate pensions in terms of the cost of living and the quality of life – and of 'pensioner poverty' for many retired workers from the public sector as well as the private sector.



However, even the current final-salary pension arrangements, inadequate as they are, are too much for the potential privateers of public services to bear. So this ConDem government that serves the interests of the financial monopolies plans to undermine the public sector pension schemes to the extent that, faced with increased contributions over a longer period for lower returns, workers will not participate. The schemes will then become 'unviable', and more easily dismantled. Of course, the parliamentary pension scheme for MPs will continue to prosper. But, attempting to mask this sweeping political intent, they present their proposed pension changes – both to occupational schemes and the state retirement pension – simply as economic necessities, and the unions are encouraged to pursue negotiations in the normal way of any other industrial dispute. Public sector union slogans such as 'Save Our Pensions' indicate an underestimation of the true scope of government intentions. The political, class nature of the attack, and its position within overall government strategy, have not so far been given proper consideration or emphasis. Public support for the campaign – which has remained very strong throughout – is largely based on issues of “social justice', 'fairness' and high regard for 'front line' and poorly paid public sector workers ... not for the most part on support for the defence of public services, working class communities and strong trade unions. The basic intent of government policy – preparation for privatisation, though recognised in union materials, has yet to become the central issue – is the issue which could unite the unions more thoroughly, and consolidate support across public and private sectors, and within communities generally.

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The European dimension

The role of the European Union in the offensive against pensions across the continent is not widely understood by trade unionists or by the population generally. Although the Tories criticise some aspects of the EU which they believe might threaten the banks, hedge funds and unregulated markets in the City of London, they do not oppose the pro-big business treaties and institutions of the EU. British capitalists have played a full part in preparing the Europe-wide attack on working people's pensions. Some of our top monopolists participate in the European Round Table of Industrialists, which in 2000 submitted a paper to the EU Lisbon Summit entitled European Pensions – An Appeal For Reform. The document called for raising state pension retirement ages, increasing workers' pension contributions, reducing employers' contributions, cutting workers’ benefits and shifting state and public sector pensions into the private sector. In 2001, all EU member states including Britain adopted policies based on the ERT proposals. In 2002, they agreed to formulate national plans that would achieve its objectives. In 2003, the European Union issued Directive 2003/41/EC on occupational pension schemes, promoting privately-provided pensions and opening up the whole European 'market' in pensions to the transnational finance industry, which would lead to a massive transfer of public funds into the private sector. In 2005, the European Council of Ministers issued an updated Lisbon Action Plan [SEC(2005)192] which, under the heading 'Developing active ageing strategies', required EU member states to ensure 'the suppression of early labour market exit'. In 2010, EU Commission president Barroso proclaimed the need for pension 'reform' to be at the heart of the Europe 2020 strategy, in the light of 'aggravation and amplification of the pensions issues as a result of the economic crisis'. The resulting Green Paper and its responses included provisions reflected in the current assault on pensions in Britain.



The erosion of private sector pensions

A central plank in government strategy is to divide private and public sector workers. The severe erosion of private sector pension provision has made it possible for the ConDems and the right-wing media to draw unfavourable – but false – contrasts between private and public sector entitlements. Over many years, workers in the private sector have seen their pension rights eroded, decent pension schemes wound up and their 'deferred wages' – which is what pensions are – stolen from them. Internationally, the financial monopolies demanded that private sector companies classify their pension arrangements as 'liabilities' in company accounts. The response from employers was to begin the process of undermining and winding up these 'liabilities'. Typically, this took place over a number of years, by attrition. Firstly, the schemes were closed to 'new entrant' employees, thus dividing the workforce. Then, year on year, further 'adjustments' were imposed until the schemes bore no relation to those that their members had thought were guaranteed. The ability of private sector workers to defend their pension provisions as well as other conditions of employment etc. has been severely weakened by: company closures and the destruction of large centres of production; the employment of more and more workers in small workplaces; and the imposition of individualised bargaining particularly in the services sector – together with the damaging effect this has had on trade union organisation. With the recent announcement by Shell, all of Britain’s top 100 companies will have closed their final salary pension schemes to new employees. It is the employers’ success to date in undermining and destroying pension schemes in the private sector that the government wants to replicate in the public sector. They even have the gall to attempt to use this intent to their own advantage when they pose the question, 'Why should public sector workers enjoy pensions of a type that private sector workers no longer have?' But now, with the example of the public sector campaign and industrial action, we see the beginnings of renewed collective action on pensions by private sector workers such as those at Unilever, Jaguar and elsewhere. It is through such developments that the private sector unions can again demonstrate the necessity and value of trade union organisation – and the need for a co-ordinated approach with the public sector.

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The public sector pensions campaign

The unions have successfully mobilised members in great strikes and demonstrations, with millions taking part in industrial action – many for the first time – and millions more encouraged by their struggle. Towns and cities all over Britain have witnessed well-supported and high-spirited marches and rallies, with widespread support from the general public. A number of the unions have produced alternative economic and political programmes opposing the government's austerity measures. Many trades union councils have linked up with anti-cuts groups and other organisations such as the People’s Charter to run successful local campaigns. Yet, despite all this and the first-class analysis and inspiration provided by some trade union leaders, the movement as a whole has not developed a real strategy for winning. Inter-union unity and co-ordinated industrial action has been largely perceived by the majority of unions as a tool to improve their collective negotiating position and latterly, by some, as a useful position from which to retreat into individual service specific 'negotiations'. Now the trade union movement has to consider the future. The Con-Dem regime is conducting a general political attack on the working class. The unions have responded with limited industrial action. While this has produced great demonstrations of resistance, this approach on its own does not and will not meet the challenges faced by the working class and the trade union movement. The pensions battleground was not one chosen by workers and their unions. It is a conflict provoked by the government on an issue that it believes it can win – through the age old strategy of 'divide and rule'. Of course, had the public sector unions ignored the provocation, the government would have won without a fight, and the credibility of public sector unions would have been undermined. But the unions rightly took up the gauntlet, aware that they needed to work together and maintain unity if they were to win. But unless and until the real objectives of the government's attack on pensions is clearly understood, along with the character of the government itself and the lengths to which it will go to in order to 'divide and rule', the pensions’ campaign will have very much reduced prospect of success.



Negotiations, unity and ‘divide and rule’

Throughout the so-called 'negotiations', government ministers (predictably in the light of their true intentions) have shown no willingness to discuss the main planks of their pensions policy. The June 30th action was a proper response to this, but the failure of a number of unions to present a united front at that time indicated their lack of understanding of the nature of the struggle. While the one-day strike was very successful in mobilising the members of the unions taking part, and in focusing public political attention on the issue, the lack of united action across the board encouraged the government to think that the unions could be divided and beaten. The government's continued frustration of negotiations led to the huge November 30th united strike with up to three million workers taking action. In the run up to the action, however, differences of emphasis between unions became apparent to all. Some emphasised the need for escalating action – though how this would develop was not planned. Others identified the day of strike action as an opener to a 'four year strategy' – which in fact illustrated a misplaced confidence (or at least a desperate hope) that the issue would be best resolved by the future election of a Labour government. This assumes that the unelected ConDem regime, imposed at the behest of the bankers, should be allowed to carry out another two or three years of anti-working class rule. Recent statements by the Labour leadership, backing service cuts and pay cuts, have further shown the inadequacy of this stance. Throughout the preparations for the November 30th one-day strike, a massive mobilisation effort in all the unions bore excellent results, raising the awareness and determination of workers across Britain. But the preoccupation with maximising ballot turnouts and the participation in the strike led to a lack of proper consideration of a strategy for winning. Though there would clearly need to be a continuing campaign beyond November 30th, as expressed at TUC conference and elsewhere, the Public Services Liaison Group failed to agree a common approach – apart from the principle of a united struggle – that would prevent the isolation of any workers or individual union through individual sector 'settlements'. No real discussions took place across the unions as to how the campaign could continue in unity and how predictable tactics of divide-and-rule from the government would be thwarted. Those unions promoting the necessity of this

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united approach, in stark opposition to the government’s position that workers should pay more and work longer for poorer pension arrangements, were criticised not only by ConDem ministers, the media and the bankers. They were later criticised, too, by leaders of the TUC and other unions! The Chancellor of the Exchequer's Autumn Statement on the eve of the November 30th illustrated the government’s appetite for a battle that they believed would be short-lived and winnable. There was no sign of any government attempt to 'win hearts and minds'. The Autumn Statement provocatively increased the threat to public sector jobs, increased the number of years of real-terms pay cuts and signalled the government’s intention to move against national pay and other agreements. The government reinforced its strategy of 'divide and rule' with a moderately successful public propaganda campaign on the differences between public and private sector pensions, and a drive to bog down and divide public sector unions over service-specific details. The December 20th deadline for unions to sign up to 'Heads of Agreement' – an approach that should be unacceptable to any union – was designed to drive a wedge between unions in the public sector, identifying those that refused to sign as having 'ruled themselves out' of further 'negotiations'. Government threats that refusing to sign the 'Heads of Agreement' by December 20th might see any concessions withdrawn were intended to discredit those refusing to sign. On the other side, those signing up were encouraged to think that they would make further gains in service specific negotiations. The government’s small 'concessions' in terms of the short delay in introduction of increased pension payments for some, and an improvement in accrual rates for others, were genuinely brought about by the united action. But they were also designed by the government to create and reinforce divisions among the unions, by playing upon the differences between the various pension schemes. The truth was made clear by Cabinet Office Secretary Francis Maude on December 20th, when he stated that there was 'no more money on the table'. The following day, Treasury Secretary Danny Alexander assured MPs that the government were on track to make their proposed 'tens of billions of pounds' of savings in full. It was, and remains, sheer delusion to imagine that one or two major



pension schemes can be removed from the fight and escorted to safety. Splitting the united front between the unions worsens the prospects for defending the other schemes – and guarantees that any limited 'protection' of certain schemes will be even more savagely attacked further down the line. Differences also remain because some union leaderships have less confidence in their members, or those of other unions, to continue the struggle. The lack of a united union strategy has enabled a defeatist attitude to develop in a minority of union leaders from an early point in the struggle.

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Broadening the battle lines— a strategy to win

It should be clear that 'more of the same' in terms of sporadic, one-off strikes and demonstrations will not – by themselves – force the government to back down from what is not just a pensions policy, but a central plank in its strategy to privatise public services and undermine public sector trade unionism. Our first priority must be to attempt to re-establish unity across the unions. Some continue in 'negotiations' on the basis of the 'Heads of Agreement'. The lack of progress they will inevitably encounter should be monitored carefully and their members given proper opportunity to bring their unions back into struggle alongside the rest, and to reassert the principle of a united struggle. This can and will only happen if the trade unions, regardless of their current differences of approach to 'negotiations' and further industrial action, agree a clear and credible strategy for winning. They need to draw up, jointly, a programme of action with the participation of all unions in those elements of it that they are in a position to take part in. This could prepare the ground for the restoration of a fully united struggle in the near future. There is a clear need for the active, campaigning promotion of an alternative vision for public services by all the unions in the public sector, working together. That vision is of well-funded public services to meet the needs of individuals and communities, with decent pay and conditions for those providing them – including decent pensions. The joint Unite, PCS, NUT, UCU and National Pensioners Convention “Fair pensions For All” pamphlet on pensions, public and private, is an excellent example of how this might proceed. How would such public services be funded? The People's Charter – already policy adopted by trade unions at the 2009 TUC conference – sets out the case for progressive taxation on the super-rich and big business monopoly profits. It should also be emphasised that investment in public services and a shorter working life creates jobs in both the private and public services, thereby combating mass unemployment. Alongside this, we need an industrial action strategy for those unions willing and able to take it at an early stage, including further national coordinated action, rolling strike action across sectors and geographical areas, targeted protracted action by key sections of workers essential to the running of the



state machine, and the development of pay and pensions action in unity with unions in the private sector – focusing on the Unilever, Jaguar and other such battles and encouraging further private sector involvement. Such a political and industrial strategy would require a higher level of political understanding of the government's strategy on the part of trade union leaders and members, and as far as possible among the general public. Trade union education, communications, publicity and campaigning have not generally been aimed at developing that understanding. Unsurprisingly, the TUC has done nothing to develop such a consciousness, while the Labour Party leadership has done all it can to prevent it developing. The public sector unions should all now be working together to develop that political understanding among their members and within wider communities. Of course, the use of anti-trade union laws may be threatened to outlaw industrial action, should the unions clearly identify the campaign as one against government policy and not simply a 'legitimate trade dispute'. There is also the continuing threat that an escalation of industrial action would be used as the excuse to introduce new anti-union laws, including fresh restrictions on the 'right to strike'. But in this 'long, hard and dirty fight', as it was famously described at one TUC conference, we know that the government is only as powerful as we allow it to be. United generalised strike action across the trade union movement, with public support produced by unified campaigning in our local communities, would shake the ConDem coalition to its foundations and quite possibly split and defeat it. In this respect, the whole movement should study the arguments put forward very recently by the Institute of Employment Rights, namely, that the 1998 Human Rights Act obliges the courts to give effect to the rulings of the European Court of Human Rights (not to be confused with the EU Court of Justice). The ECHR has already ruled that Article 11 of its associated convention, which guarantees 'freedom of assembly and association', requires states to permit peaceful protests and strikes against government policy. Leading employment lawyers Keith Ewing and John Hendy QC strongly argue that the government would be very hard pressed to gain an injunction to ban a TUC national day of general strike action against the government’s austerity and privatisation programme. Current Tory hostility to the ECHR – a body which has no relation to the

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European Union – may be better understood in the light of this ruling. In addition to this strong legal argument, we all know that, should the TUC call for generalised action in the current circumstances, there would be such an enormous positive response from workers across all sectors that the government would be taking a great risk in using the anti-union laws. For this same reason, powerful companies have sometimes declined to use the courts when confronted by united, militant action, as was seen during the strike waves sparked at Lindsey oil refinery. There is also the concern among many union leaders that such a campaign would 'embarrass' the Labour Party and damage its policy of appealing to the City and the 'squeezed middle', etc. It would, they argue, reduce the likelihood of Labour winning the next General Election. Yet such a victory is already in doubt due to the Labour leadership's continuing commitment to monopoly finance capital, 'deficit reduction', public spending cuts, pay cuts and so on. But again, we know that a strong trade union movement acting in defence of workers and our communities is the context in which we are most likely to see the defeat of the Tories and their ConDem coalition.



The next steps

A renewed, united 'broader battle lines' strategy, aimed at involving all relevant public and private sector unions in some or all of its aspects, would be likely to include: 1. A hard hitting joint union statement exposing the government's overall

strategy for privatisation, the transfer of large scale public funds to the private insurance and finance industry and for the dismantling of public sector trade unionism trade union organisation. This would also need to highlight the significance and role of the attack on public sector pensions in achieving these aims. Unions will have to recognise and explain the political nature of the pensions fight.

2. All public sector unions should be able to promote and work at national and local levels on a joint campaign with the National Pensioners’ Convention for 'Pensions Justice', 'Fair Pensions For All' etc., involving occupational pensions in the public and private sectors as well as the state retirement pension. Pressure should be exerted on the TUC to put national and regional resources at the campaign's disposal.

3. All the unions, regardless of their current position on 'Heads of Agreement', 'negotiations' and further strike action, should be able to unite their memberships in a political campaign, starting immediately in local communities, aimed at the May local elections, attacking the bases of Tory and LibDem support in local government. Such a target would give the campaign a clear focus and encourage members' confidence that an achievable goal exists that could make a real difference in the pensions struggle. The position of the Labour Party leadership supporting cuts in public services and pay also needs to be challenged as part of this campaign.

4. Unions must promote the affiliation of all local branches, wherever possible, to their local trades union councils, helping those bodies to develop local campaigns alongside anti-cuts and People’s Charter groups etc. in support of public services, exposing the attack on pensions as preparation for privatisation. Campaigning should include, as appropriate, house to house and town and shopping centre leafleting, street stalls, public meetings, use of the local media, demonstrations, lobbies and even

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(where sufficient support has been built) occupations. 5. All the Public Sector Liaison Group unions should contribute to building

unity between the public sector unions, and with private sector unions taking up the fight for pensions.

6. Further co-ordinated 'guerrilla' industrial action by those unions in a position to take it – including national days of united action, rolling strikes, targeted protracted action by key workers, action co-ordinated with private sector strikes, etc.

7. The unions need to implement such industrial action at key points between now and the local elections in May, building for 'all out' action before the April 1st deadline for imposing higher pension contribution levels in the public sector and for mass May Day demonstrations for pay, pensions, public services, industry, and the right to 'decent work'.



Promoting political understanding

Union members would need to be fully aware that these 'broader battle lines' would include industrial action as a means to an end: focusing public minds and developing people's political understanding of the government's intentions. Trade unionists should not expect that extended and expanded industrial action alone will win the day. A strategy with such clear objectives has the potential for maintaining and increasing the participation of union memberships, uniting the unions and bringing local communities into action in support of services and against the ConDem government. It has the potential to divide the Coalition parties and drive a wedge between their local councillors and central government. It would strengthen those within and outside the Labour Party who demand from it a complete break from neo-liberal policies, and at least some recognition of the needs of workers. But it is a very challenging approach requiring a higher political level of understanding on the part of trade unionists and their potential supporters. This is an important struggle against the ConDem coalition, but it is unlikely to be the last unless it develops into a struggle to force this government from office. This is a government of millionaires, cobbled together from two parties each of which failed to win a mandate in the General Election – a government which, backed by powerful economic and financial forces and interests, is set on a course of destroying public services and our unions. Just as workers in Greece and Italy have had unelected bankers’ governments forced on them, we too have an unelected government in Britain directly representing the finance capitalists. We need to match their determination to destroy our jobs, pay, pensions and services with our own determination to drive them from office. The outcome of the pensions struggle will have enormous repercussions for the whole labour movement. Defeat for the public service unions would immediately open the way for further attacks on jobs and wages, including pay cuts and the break up of national pay in favour of regional, plant and individual pay bargaining. It would give the government a green light for escalating its austerity and privatisation

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programme. Defeating the government on public sector pensions, on the other hand, would shake its entire authority and inspire millions of workers to step up resistance. The labour movement could move onto the offensive for an alternative economic strategy as supported at the 2011 TUC conference, stepping up the campaign for the policies of the People’s Charter – 'For a people’s Britain, not a bankers’ Britain'. The chips are down and the stakes are high. The government knows it and is geared up for the fight. We need to build a popular, democratic anti-monopoly alliance, with the unions at its heart. The public sector unions find themselves now at the centre of this struggle. We will stand or fall to the extent that we maintain and develop our unity within a real strategy for winning.

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Broadening the Battlelines