Tories Again Steal Labour’s Clothes
In 1957 the Labour Party Conference adopted a new pensions policy to which they gave the grandiose title of “National Superannuation”. Under their proposals, said their policy statement.
“there would be two elements in the State pension, a flat-rate element and a graded element. Every insured worker, including those in approved private schemes, would be entitled to receive the flat-rate element, as they do now, whereas only those covered by National Superannuation would receive the new graded element. Thus everyone in the country, when they reach the approved age, would draw (1) a flat-rate pension and (2) a graded pension, due to him either from an occupational scheme or from National Superannuation.”
Employers were to contribute more towards the cost of National Superannuation than the workers and some of the money was to be invested in stocks and shares.
At that time, neither pensions nor contributions were related to earnings (or “graded”): everybody paid the same National Insurance stamp and got the same pension, while those who had no income apart from this pittance had to resort to National Assistance.
Labour had hoped that this vague but superficially attractive promise of “Half Pay on Retirement” (as Richard Crossman once unwisely put it) would win them the next election. Imagine their dismay when the Tories announced in the election year of 1959 that they were to introduce earnings-related pensions themselves. This State Graduated Pension Scheme was denounced by the Labour Party, with some justice, as the “Tory swindle”. It is still going and pays a man the princely pension of 2½p a week for every £7.50 he pays in! Even the Tories recognise that it has been an utter failure and now propose to abolish it (and swindle its victims even more by not protecting them against inflation).
Elected to power in 1964, Labour set to work on their National Superannuation Scheme. They didn’t exactly give this matter any priority as it was not until 1969 that the details—to apply from April 1972—were announced. Even then, what emerged was somewhat different from the original 1957 policy. Instead of two State pensions, one flat-rate and one earnings-related, there was to be only one earnings-related State pension; employers and workers were to pay the same; the money was not to be invested in stocks and shares; and only the lowest paid were to get half-pay on retirement (a big deal that would have been, seeing they could hardly live on full pay).
Grossman’s National Superannuation and Social Insurance Bill was still going through Parliament in June last year when the Labour government was kicked out. The Tories had criticised the Bill as too complicated, but had promised their own reform of pensions. Their alternative plan was published in September in the White Paper Strategy for Pensions. What is interesting about these proposals is their amazing similarity to Labour’s 1957 plan. The passage quoted earlier could well have been Sir Keith Joseph explaining the new Tory proposals.
The Tories propose a basic flat-rate pension from the State (like the present below-the-poverty-line £6 a week) which everybody will get and an earnings-related pension either from a private scheme or from the “State Reserve Scheme”. It is this Reserve Scheme that bears the resemblance to Labour’s original National Superannuation. For not only will employers pay more towards it than workers but its funds will be invested in stocks and shares. When Labour had proposed this in 1957 it was greeted by howls of “back-door nationalisation” by the Tories. Now, apparently, they have changed their minds and done what not even Crossman dared to do.
The Tory plan also involves another measure which might have been expected to come from a Labour government: there will be earnings-related contributions for the basic flat-rate pension. In other words, the higher paid will pay more than the lower paid but will only get the same pension.
Labour would have claimed that this was part of some plan to redistribute wealth from the rich to the poor. It is nothing of the sort since the fortunes of the wealthy are to be left untouched. It is really only redistributing income from the not-so-poor to the poor, a redistribution of poverty amongst the working class. Labour’s bill would have had a similar effect and this in fact is all most social reforms can amount to under capitalism.
That the Tories can introduce reforms originally proposed by Labour is a further proof that the two parties are basically the same. They are both committed to capitalism and are both trying to solve its problems without upsetting the profit motive. So it is hardly surprising that they both come up with similar reforms.
The present need to reform State pensions is the result of the failure of the previous Labour/Tory pensions policy. Nearly thirty years ago now, they were both agreed on another plan to “abolish want in old age” —the Beveridge Report. The recommendations of this Report were embodied in the National Insurance Scheme set up in 1948 and still extant. Today this Scheme provides on retirement a miserable pittance which, even the government’s own White Paper admits, is about £2 below the poverty line so that one in three pensioners are forced to apply for means-tested National Assistance or “supplementary benefit” as it is now cynically called.
Anyway, earnings-related pensions are only supposed to abolish—some time next century, according to the government’s own figures — destitution in old age. Poverty, in the sense of being deprived of control over the means of production and its products, is the normal condition of the class of wage and salary earners, during their working lives just as much as during retirement. It is only because they are poor that workers need doles to protect them from destitution in old age.
We doubt, however, if the new reforms will ensure that no old worker falls below the poverty line, especially since the Tory proposals, like Labour’s Bill, envisage the continuation of the modern Poor Law known as the Supplementary Benefits Commission. Poverty, and in some cases destitution, in old age will be the lot of the working class as long as capitalism lasts no matter how many social reforms are made.
A.L.B.