The State Pension was established 100 years ago on 1st
January 1909. This followed a ten year campaign by social reformers and the
Trade Union Movement. Rallies were held up and down the country from Glasgow, Newcastle, Leeds to
Bristol. In
1899 a National Committee’ was formed and began a Campaign for a Universal,
Non-contributory Old Age Pension at 65. At the Trade Union Congress (TUC) of 1899, the
conference supported a demand for a pension of 5 shillings (25p) for all citizens
over 60 year of age. This was taken up by the co-operative movement.
It has to be remembered that prior to the introduction
of a State Pension, no provision was made for the elderly. It was estimated
that 1.3 million people in this country were paupers. You worked until you
dropped, took charity, Parish relief or went in to a workhouse. The workhouse
was modelled on the prison system, which was very harsh; if you did not obey,
the consequence was brutal.
At the time the Government pleaded poverty and the
State Pension introduction was delayed. Then as now money can be found easily
for war, but not to benefit ordinary people. The Boer war of 1899-1902 had cost
the country £250 million.
The National Pension Campaign kept the pressure up,
organising a petition of 800,000 names. In 1908 Lord George passed the Pension
Act. This meant a non contributory pension of 5 shillings a week to people 70
and over, means tested, based on character. Over 500, 000 people claimed the
full amount. At the time 5 shillings was 25% of average earnings.
A lot has happened to the State Pension over the last
100 years, so if we fast forward to today, does the State Pension give working
people a decent pension we have earnt?
Today we have a State Pension that is contributory
currently paid to men at 65 and women at 60, at a rate of £90.70 per week. This
is 15% of average earnings. The amount can be increase to £129.05 by means
testing (pension credit). In Britain,
2.5 million pensioners live below the official poverty line of £151 per week.
This relates to 1 in 5 pensioners. 62% of pensioner couples have less then
£10,000 per year. 50% of single pensioners live on less then £6,000 per year.
The Tory Government in the 1980s broke the link
between wages and the State Pension. If the Tories had not attacked the link,
the State Pension would be worth £143 per week now. It is not that we do not have the money.
Different estimates exist, if we try to be generous to the government. The
National Insurance Fund has a surplus of £38 billion growing to £72 billion by
2012. The problem comes in that government spend the money on other things
instead, like the Iraq and fghanistan wars.
The pioneers of the State Pension, I am sure, saw what
they are doing as a first step to improve life in old age. How far have we got?
There are still millions of people in poverty after working all their life. If
we put it into context of the wealth and prosperity created, the advances in
technology, Have we advanced at all? We are still fighting for a decent pension
that we have earnt.
The worrying thing is where we are going. The
Government has passed legislation (Pension Act 1995) that will mean women’s retirement
age will increase to 65 by 2020. By 2046 no one will get a State Pension until
they are 68 years old. In the 21st Century we all should have an
income that allows us to enjoy life at an earlier age.
The proposal of the Government to introduce
Personal Accounts by 2012 re- enforcing the present philosophy of individual reasonability,
rather than collective responsibility to welfare care. Even the Times newspaper
in August 2008 stated, ‘Personal Accounts are a good idea in theory, bad in practice’.
‘It encourages the lowest paid into a system that could make them worse off’.
To be better off, a worker would have to save within the scheme £30,000 to take
them above the means tested pension level of £129.05.
Employees under the Personal Accounts scheme
will be forced to contribute 5% of their earnings in to the Personal Accounts
pension, when many do not get paid enough now to make ends meet. Employers will
have to contribute 3% by 2015. Many employers will demand that money back in
either increased productivity or cut wages or not give wage increases.
This scheme will cut future governments’
State Pension expenditure. Bear in mind we all contribute into the National
Insurance fund to receive a pension, why would a government proposal an auto–enrolled
personal account system if it did not leave the door open to become privatised?
The government have already put out to tender, the right to manage the pensions.
The price of bread, and of all the other essentials of
life, are generally the same for a pensioner as for a worker. That is one
reason why we believe pensioners should be entitled to the equivalent of a
minimum wage. That should be a right for those who have worked all their lives.
Instead the government is looking to whittle away the fragile gains of a
century of struggle.
