Twenty million workers have to be recruited back into their unions: this year's TUC Congress must herald a rebirth of trade unionism... TUC Congress: back to the workplace
WORKERS, SEPT 2005 ISSUE
Should the TUC Congress meet annually, biennially, or every month, or not at all? Like all organisations in the fast emptying house of British trade unions, the TUC does have genuine financial and organisational issues to face. But as in all such debates, do you decide to prune back or regrow?
Congress, a potential parliament of workers, reflects the level of consciousness and organisation of workplaces. That the media are no longer interested in it merely reflects that workers aren't either and ultimately the distance between unions and the real interests of workers in their immediate lives at work and in the future of their country has been to blame.
Only a mandate from members
Always subservient to workplace organisation, despite the parliamentary aspirations of many of its hopefuls, the TUC cannot and never has been able to do anything significant about rebuilding trade unions. That is the independent unions' job.
One tragic role the TUC has always fulfilled has been to facilitate surveillance and intervention in trade unions by the security service. Some at Congress House have never taken their mandate from their members. Another role has been to marginalise the genuine struggles of awkward workers and channel their deeply political struggle into the depoliticised and humiliating processes of lobbying.
The TUC consists only of its affiliates, and there are several notable and excellent trade unions which are not in the TUC — the RCN and BMA are good examples. In their turn, affiliates consist only of their branches and these are currently bereft of active members in most unions. Twenty million workers have to be recruited back into their unions and this need dominates all work and debates of organised workers, or should do. This Congress should herald a rebirth of trade unionism.
State interference
To achieve the rebirth we need freedom from state interference at all levels. This year the call for the repeal of anti trade union legislation will be louder and delegates will also be asked by ASLEF to consider reasserting the right for our unions to draw up their own rule books.
But what will we campaign for once our rule books are liberated? Are unions prepared again to face sequestration in the fight for their own industries and services, and to take supportive action for others as some have done in the past?
It becomes clear when considering the debates at the Scottish and Wales TUC and the motions presented for Congress this year, that we will be able to achieve little unless we grapple with the sources of many of our problems and the obstacles getting in our way. Most of these arise from the concentrated and centralised force of capitalism in our part of the world exercised through the European Union.
The wealth in pension funds originated in manufacturing production. Frankly none of the manufacturing unions have got to grip with this issue and have largely stood by while jobs, plant and machinery have been vandalised or exported.
Pensions: the double whammy — our funds are plundered, and they stop us investing in our own industry
The trade union movement wants to do something about the alleged pensions crisis but fails to consider either the causes, or motivation for the situation, where the dead hand of the EU has played a major role.
The EU directly instructed Britain to raise the pension age and do something about costly final salary pension schemes. This of course would make pension provision easier for the employer by forcing workers to continue working even longer.
All completely unnecessary — pension provision was calculated accurately at the time of its inception to cope with all the changes in demography over the decades.
Springboard
In stark contrast to the euro countries, Britain has a potential source of finance which, if properly invested, could act as a springboard to restore national wealth creation, science and industry. Britain has 75% of the European Union's total occupational pension scheme assets, amounting to approximately £750 billion. This occupational wealth, created by past and present generations of workers, has been put aside to pay present and future pensions, and represents the equivalent of 81% of Britain's Gross Domestic Product (GDP). By comparison, occupational pension provision in Germany represents 16.3% of its GDP, with equivalent figures for France at 6.6%, Italy at 2.6% and Belgium at 5.9%.
Already, Britain's pension funds hold record levels of overseas stocks and shares. The average fund now has 28% of its assets invested elsewhere with some funds having as much as 50%. In the meantime, our country is in desperate need of investment. Now the EU wants to gain access to the rest by further liberalising national investment rules for pension funds and enabling multinationals to provide unified pension plans for their staff, reducing costs by millions per year.
The EU Directive on Pensions, by enabling a financial institution in one member state to manage company pension schemes in other member states, will simply result in the exit of more capital from this country, denying us the investment we need.
Politics, not age
When you look at why the cost of occupational pensions has increased by some 50% over the past eight years the picture becomes clearer. This has not come about by accident nor because workers are living longer during retirement, but because it has been planned.
In 1995, the Treasury, then run by the Tories, decided that to help meet the EU convergence criteria (required by the Maastricht Treaty to begin preparations for the euro) it would stop the issue of government debt through the UK financial gilt market. A gilt is a promise by the government to pay interest on a loan, which it has raised from the capital markets, with the loan becoming fully repayable at the end of an agreed period, ie gilt-edged security.
At the time, the government said that it was reducing the National Debt. What it really meant was that the government was no longer able to help finance its revenues through the issue of new gilts because that would contravene the parameters laid down by the EU on borrowing. The result was that the supply of new gilts ended, whilst the financial demand for gilts increased.
Crucially the demand for 15-year and 20-year Government gilts increased. These gilts have always been the ideal financial instruments to underpin occupational pensions whilst in payment. This is because people retiring at 65 tend to go on living for a further 15 to 20 years.
So gilts with a 15 or 20 year term are ideal security to underpin the financial liability of an occupational pension becoming payable over the same period.
Supply and demand
Unsurprisingly, given the laws of supply and demand, the price of the remaining gilts issued in the market prior to 1995 have since rocketed, to the extent that the cost of a subsistence level of pension of £7,500 per annum payable to a male aged 65, for example, now requires at least £100,000 of capital to match the financial liability while in payment.
The policy of no longer issuing new government gilts has continued since 1997 and so it is small wonder that the cost of pension final salary guarantees has increased in the manner they have.
By the same token, the Equitable Life insurance company problems also originate from the same shortage of available gilts whereby they cannot now meet the cost of matching the 4% annualised guarantees under their insured policies. This has led to the same insolvency problems as experienced by our pension funds.
Insolvency
Who would have thought in the 1970s and 1980s when the Equitable Life sold these policies that an underlying 4% capital guarantee would render it insolvent in 2002? This is not a pensions crisis; it has been planned since 1995 as part of the drive to European integration.
Further evidence of this comes from what is known as the Minimum Funding Requirement (MFR to the Treasury) introduced by the Tories in April 1997 but conceived in 1995 at the time the Treasury decided to dry up the gilt market.
The MFR is a government-prescribed method of measuring the solvency margins of an occupational final salary pension fund. It was put in place to gauge the impact that the government's reduced borrowing requirement would have on our pension funds. In other words: create a problem, measure it and then call it a crisis.
Since 1997 the MFR has identified huge deficits in occupational pension provision. Once identified, the employer then has to make good the deficit by paying in large amounts of capital to make up the shortfall.
Winding up
In practice, what happens is that the MFR acts as an excuse for the employers to wind up their final salary pension commitment. This makes the MFR a convenient hiding place for the employer. It is also a distraction away from the government's failure to issue gilts, and shifts attention from the fact that throughout the 1980s and early 1990s employers were boosting their profits by taking surpluses from our pension funds.
EU control
Now Amicus wants an industrial policy based on the European Social Model, and Connect — which represents 20,000 managers and professionals in the communications industry — wants government to spend on British industry through procurement projects. But the EU forbids an independent industrial policy and the control of capital and labour required for it, and it sets the rules on procurement, which require all contracts worth over certain amounts (depending on their nature) to be put out to tender on the European market.
Some other European countries break the rules, but this is not the point: the point is that the rules are anti-industry and pro-free market in the first place.
Seeing the President of the European Union (EU) at the recent G8 summit gave perhaps the impression that he was a new head of State. Perhaps it should have been called G9.
It was precisely against the formation of a new superstate called the EU that French and Dutch workers and trade unions led the successful campaign in their countries against the proposed EU Constitution.
By comparison the TUC said last September that it had no view on the matter and wanted it properly debated. The General Council members flew off to Europe to vote at the ETUC for the Constitution.
Following this most trade unions in Britain voted at their own conferences against the Constitution. At the coming Congress the already tarnished federalists must be further exposed for the traitors that they are. Congress should reject the proposed EU Constitution and honestly for once on this issue reflect members' views. The RMT has given an opportunity to do this.
We want to make poverty history. Countries in the EU have collaborated to plunder not just Africa, but eastern European countries and the remaining organised and skilled workers of Western Europe. The gap between the rich and poor at home has never been greater. The EU widens it and mass migrations and broadening immigration policies fuel it.
We want investment in British industries, transport, public services, technology and agriculture. Yet we pay into the EU £3.5 billion to subsidise others, and to fund widespread fraud and corruption each year. Trade unions would be penalised if their annual accounts were suspect. The EU auditors have refused to sign off its accounts for 10 years, so flagrant is the corruption.
The Tory Prime Minister Ted Heath lied to the nation when he took us into the European Economic Community. Harold Wilson lied to keep us in it at the time of the referendum thirty years ago. Margaret Thatcher lied to get Parliament to sign the Single European Act, which drastically reduced the power of an elected British government. John Major lied to sign us up to the Amsterdam Treaty. Tony Blair lied to us to sign the European Constitution.
Disgraceful
How disgraceful to then find trade unions, conned by this history, still attracted to the European social model of 10% unemployment, privatised services and minimal pensions.
With the recent French and Dutch No votes on the Constitution the tide is turning against the employers' vision of Europe, which is the EU. British workers have an important role to play in accelerating the process of reclaiming our nation.
This is a key internationalist role in an increasingly dangerous world. The EU represents heavily armed globalisation on our doorstep. It represents low growth and high unemployment. It offers no model for British or other European workers.
War or peaceful co-existence?
Can we be free and rebuild our country if we are at war? If £5 billion can be found to invest in killing 25,000 Iraqi citizens, twice that could be found this year by the State to invest in our life giving industries.
In rejecting terrorist attacks on British workers at this year's Congress, delegates will also reject the Iraq war. The CYWU gives delegates the right to express their views forthrightly on these matters. At the last election only a tiny minority voted to elect a government subservient to the Thatcherite economics of the EU and the imperialist aggression of the United States. What about a government for Britain, for a change?
Congress will support the Venezuelan government in its efforts to utilise its own resources for its own people, just as we have done before in respect of Cuba. How long can we applaud others yet allow our government to squander our resources and skills to the highest bidder? Now it is time to raise the banner of independent trade unionism acting in the interests of British workers.