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Pensions attack brings tipping point nearer

On both sides of the Atlantic, a massive onslaught is under way with the single purpose of dramatically reducing the share of national wealth going to working and retired people in favour of the rich, powerful elites who own and control the economy.

This is not an “ideological attack”, as some trade union leaders in Britain claim, but capitalism trying to “solve” the crisis that has enveloped the system since 2008 in the only way known to it.

The global market for commodities has shrunk, with recession and unemployment taking over. As the low-cost Chinese and Indian economies seize the initiative, corporations operating in North America and Europe are desperate to drive down costs and increase the surplus going to shareholders as the basis for “renewed growth”.

In Britain this week alone, the Coalition launched its historic attack on welfare benefits, including the disability living allowance (DLA), and published proposals that undermine public sector pensions. The aim is to cut DLA expenditure by 20% by 2015-16. The Disability Alliance says: “We believe the new approach risks over 835,000 disabled people losing what is often described as an essential ‘lifeline’ of support.”

Yesterday, with considerable help from Labour peer Lord Hutton, public sector pensions were hung out to dry. Under the plans, firefighters and others will have to work well into their 60s, pay more in contributions and receive less in pensions than at present. Pay more for less, in other words.

Yet, as a table in the Hutton report shows, the actual cost of the present public sector pensions scheme as a share of national income is forecast to decline over the next 20 years. So this is all about spending cuts and a redistribution of wealth to the private sector.

Which is the story in Wisconsin, where a union-busting law has been railroaded through the state legislature by Republicans against a background of mass opposition which has included sit-ins and demonstrations into the early hours of the morning. The Wisconsin bill “could spell the beginning of the end of public-sector unions,” warned former US Labour Secretary Robert Reich.

Collective bargaining rights are substantially eroded and state workers have to pay 5.8% of their salary toward pensions and 12.6% of their health-insurance costs. Calls for a state-wide general strike are under discussion. Similar moves are afoot in Ohio as states face up to a combined debt of $100 billion that results from the recession.

In Britain, as in the United States, the question is how to fight against capitalism’s attempts to make workers pay for the crisis. In Britain, it certainly cannot be through the Labour Party which is essentially glove in hand with the Coalition. Labour-controlled councils have, for example, passed on government spending cuts at town hall level.

Labour leader Ed Miliband, who  favours a “fairer”, “prosperous capitalism”, instructed his backbenchers this week to abstain (!) on the government’s anti-welfare legislation, leaving a handful of MPs like John McDonnell to do the right thing and vote against. Why did Miliband do this? Because many of the government’s proposals actually follow from attacks on benefits begun by New Labour, so there is no disagreement in principle between the two major parties.

While trade union leaders lined up to attack the Hutton report and threatened strike action, Labour’s response was muted to say the least. Angela Eagle, shadow chief secretary to the Treasury, only said that “it would be deeply unfair for public sector workers to disproportionately bear the brunt" of what were “tough choices”. Thank you and good night.

Add in soaring prices for food and fuel, rising unemployment, the attack on the NHS and other public services and you sense that a tipping point is coming. Most people will soon find it simply impossible to get by. When that occurs, the road to take will be more like Egypt’s ongoing revolution than one-day protest strikes and lobbies of an undemocratic Parliament stuffed full of pompous, self-seeking 'representatives'.

Paul Feldman
Communications editor
11 March 2011

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