Hansard

The motion that is before the Parliament was passed unanimously at Labour's Scottish conference in February. I hope, therefore, that Labour members in particular will support their party policy today.

More than 1 million workers went on strike on 28 March in the biggest industrial dispute that Britain has seen for decades. They made clear to all their anger and determination to defend their pension rights from attack. I was on the picket line that day, as were all my Scottish Socialist Party colleagues. I also attended the Edinburgh strike rally. I congratulate all the workers across Britain who took part in that day of action. The Scottish Socialist Party stands proudly alongside local government workers in this dispute. I am grateful that it has been noted that the SSP is the only political party to back the strike, attend the picket lines and support the strike rallies.

The question that 1.5 million local government workers continue to ask is: why are our pensions under attack at all? The Government and employers argue that, as everyone is living longer and the baby-boom generation is soon to retire, we face a demographic time bomb and a pension fund into which too few people are paying and out of which too many people will take. Indeed, the recent report from Adair Turner proposed that the way around the problem is for workers to pay more of their wages into the fund, to work longer—perhaps to 68 or 70—and to expect far less of a pension in return.

The SSP rejects that proposition. We do not accept that the money does not exist to pay a decent pension to everyone when they retire. The local government pension scheme is perfectly capable of meeting its future obligations in Scotland. We also reject the notion that the reward for better health and greater longevity is that people work longer and expect less on retirement—when it finally comes. Perhaps uniquely in the debate, the SSP retains the view that the retirement age should be reduced, not increased. The best way for working people to celebrate living longer is to spend their retirement in dignity and free from poverty. That is what people want.

At every opportunity that is afforded to them, the Chancellor of the Exchequer and Labour members stand up and tell us that Britain is having the longest period of uninterrupted economic growth it has ever had. We can see clearly the signs that the rich and the wealthy are benefiting; those signs are all around us. However, Labour members cannot applaud record profits and economic boom only to turn round and say that the money does not exist for the poorest among us to expect even a meagre pension.

Frankly, the facts and figures do not back up the argument that Labour members make. Britain spends only 5.5 per cent of its gross domestic product on pensions, whereas the average across the European Union is 11 per cent. The average pension for a member of the local government pension scheme is £3,800 per annum. The average pension for working-class women, who represent the overwhelming majority of scheme members, is £31 per week, which is a ludicrous and scandalous sum of money.

I remind members that the state pension is £87 a week, which is just 20 per cent of average earnings. On the other hand, the average company director retires at 60—if not 55—and takes home a pension that is 26 times that of the average local government worker. Last year, the combined profit of the banks in Britain was £35 billion and the combined profit of the oil companies BP and Shell was £25 billion.

The cuts that Labour made to corporation tax resulted in an £11 billion loss to pension funds. The pension holidays that the top FTSE 100 companies took between 1988 and 2002 resulted in a loss of £28 billion from their pension funds. It is ridiculous to say that the money does not exist to pay for decent pensions or to allow people to retire at 60.

The mood of working people is angry and betrayed. They are determined to fight for what is theirs. I remind members that pensions were not granted by philanthropic Governments or employers; they were fought for and won by previous generations of working people. Indeed, in recent years, by not matching contributions, by abandoning final salary schemes and—in some cases—by bankrupting pension schemes altogether, employers have ratted on their side of the deal.

The issues at stake in the debate could hardly be bigger. The rule of 85 is not the real issue; in some ways, it is the thin end of the wedge. The Government is using a relatively unused clause of the local government pension scheme as a precursor to wider attacks on pensions. It is iniquitous that local government pension scheme members are being denied the right to retire at 60 when that right is afforded to teachers, civil servants and other public pension scheme members.

The Scottish Executive has said that the legal advice that it has been given is that the rule of 85 contravenes European law. I ask the Executive again—as many members have done recently—to put into the public domain today the advice that it was given. The Executive's argument is nothing more than a fig leaf to cover its intention to make further attacks on local government pensions.

The political choice on the matter is clear: it is a question of whether current pension rights are honoured and we go forward to improve them, or employers rat on their obligations and take away from working people that which they have worked for and earned.

Some on the right pour scorn on the pension rights of local government workers, and say that those rights are better than those of private sector workers. The people who bleat the most tend to be company directors such as Digby Jones, the director general of the Confederation of British Industry, who will retire at 60 with a half a million pound pay-off and a £90,000 pension. That is utter hypocrisy.

Workers in all sectors deserve better pensions, and I remind them that we get nothing in this life without fighting for it. The lesson from local government workers' pensions for those who do not have similar schemes is that workers should join a union and campaign to retire at 60 and enjoy a full and decent retirement.

The Scottish Socialist Party rejects new Labour's manifesto of pay more, work longer and expect less in return. We support index-linked pensions and a £150-a-week pension for all now, rising to two thirds of the average wage. The Scottish Socialist Party hopes that a negotiated settlement that is acceptable to union members can be agreed in the dispute, but it must meet certain demands, maintain the right to retire at 60, not reduce the present pension rights and address the diabolical level of pensions that are paid out to the vast majority of local government pension scheme members.

I move,

That the Parliament notes with concern the Scottish Executive's announcement on 17 January 2006 to abolish the Rule of 85 for members of the local government Pension Scheme (LGPS) in Scotland; recognises that the proposed changes will have a detrimental impact on many working people who support vital public services, often on low wages, in a wide range of occupations in Scotland, including workers in local government, the Environment Agency, police support, cleaning and waste companies, the voluntary sector, bus companies, higher education and others; notes that this decision means that LGPS members are denied the same rights and protections as members of other public sector pension schemes which have agreed to allow retirement at the age of 60 on a full pension; further notes recent comments made by EU Commissioners on this issue indicating that changes to the Rule of 85 would not necessarily be a requirement under EU legislation and previous assurances given to COSLA and the relevant trade unions that the Rule of 85 for members of the LGPS in Scotland would be retained; recognises that members of the LGPS contribute to the scheme and want to ensure that there is a viable and sustainable future for it; further recognises that the financial standing of Scotland's LGPS is significantly healthier than schemes elsewhere in the UK and therefore calls for a distinctive approach, and further calls on the Executive to review and publish its legal advice regarding the Rule of 85 and to work with trade unions and COSLA to find a settlement which protects local government workers' pension rights.