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Relief for the rich but council workers to suffer

Jeremy Hunt’s appearance at the Leveson inquiry was obviously a good day to bury bad news, and not just on the part of the government. While chancellor Osborne was abandoning plans to limit tax relief on charitable donations, unions were signing off a pensions deal that will leave over a million worse off.

Osborne’s budget U-turn – the third this week – will please those among the super-rich who use donations to charity as a way of reducing their tax liabilities. But for ordinary workers in local government, the opposite was true. They’ll be worse off from 2014.

Unison and the GMB union leaderships have been desperate to avoid a repeat of last November 30’s massive strike against the government’s plans to make public sector staff work longer, pay more and get less on retirement.

Yesterday they agreed a deal with local government employers that includes the ditching of payments linked to final salary. Instead, the scheme will be on the government’s terms, with pensions linked to career average salaries. And adjustments will be made on the base of the CPI inflation index, which is always lower than the RPI index.

The retirement age will be brought into line with the state pension age, which is heading towards 67 and ultimately 68 under Osborne’s plans. While lower-paid workers will pay no more, higher paid staff will face increased contributions in 2014. All in all, the deal is expected to save the state £600 million a year at the expense of working people.

Heather Wakefield, head of local government at Unison, claimed “we have achieved the best possible outcome”. That’s not how the rank-and-file will see it, and a campaign to reject the deal will surely take off.

On the same day, perhaps in return for services rendered to the government, the head of Unison, Dave Prentis, was made a non-executive director of the Bank of England on the recommendation of Osborne himself. Quite rightly, Prentis is considered a safe pair of hands in a crisis and not someone who is going to rock the boat.

In practice, the collusion between big business and the government stretches right round to the trade union bureaucracy. How else to explain why a government which resembles the maiden voyage of the Titanic, and which is despised by the majority of people, is still in office?

In a little over two years, the ConDems have savaged public services, created the conditions for the privatisation of healthcare, undermined state education and sabotaged the welfare state. Yet the resistance from the trade union leaders, with a few honourable exceptions representing civil servants and transport workers, has been reduced to a whimper.

The truth is that the Labour Party and the Trades Union Congress are doing everything to avoid a confrontation with the coalition. The last thing Ed Miliband wants is to be propelled into Downing Street on the back of a popular struggle. Miliband knows that a Labour government would be doing more or less the same in response to the gravest economic crisis since the 1930s.

While Labour, the TUC and the ConDems conduct an elaborate political dance at our expense, the rest of us are effectively disenfranchised by a corporatocracy where big business and the state share the corridors of power. If Leveson has achieved nothing else, his inquiry has made this absolutely apparent for all to see.

When the pomp and pageantry surrounding the unelected, hereditary head of state’s jubilee is over, we will be back in the real, harsh world of inequality, mass unemployment, failing services and declining pensions. And facing the challenge of creating a real political and economic democracy in place of the present façade.

Paul Feldman
Communications editor
1 June 2012

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