Tuesday, April 03, 2007

Don't let Employers get away with Blaming Brown for Pension Cuts














Totally agree with this press release from Brendan Barber. Clearly, the Tory attack dogs are on the prowl. I agree that "Fat Cats" are more to blame than Brown. Check out top pensions blog (the only one?) Capital and Labour for more common sense about this and other issues.

"Don't let employers get away with blaming Brown for pension cuts TUC General Secretary Brendan Barber has hit out at those blaming changes in the way dividends are taxed introduced in Gordon Brown's first budget for the decline in occupational pensions.
Speaking to union officials at a meeting in Congress House, he said: 'Neither employers nor opposition politicians should be allowed to get away with blaming Gordon Brown for cuts in occupational pension schemes. When the tax rules were changed, pension funds were generally in surplus. Many companies had got used to long contributions holidays, and with typical UK short-termism had no plans for restarting contributions. Many companies used pension surpluses to make people redundant through early retirement. 'But when reality returned and employers started facing bills for their pension schemes once again, the retreat from quality schemes began.

Stock market pressures and longer life expectancies have caused far more difficulties than the tax change, which it should not be forgotten, was meant to encourage more long-term thinking in Britain's boardrooms and boost investment. 'But the bottom line is this. Many employers thought they could get away with cutting the pension of their staff, usually while gold plating those in the boardroom. And unsurprisingly they looked for someone else to shoulder the blame, and chose the Chancellor as their fall guy.

Ministers will need to brace themselves as employers who cut schemes in the next few years will inevitably blame the new pension settlement rather than own up to being mean. 'It is not that we are uncritical of the Chancellor. Unions have long called for state pensions to be linked to earnings, and although that principle has now been conceded we still want it to take place before 2012. But on the closure of occupational pensions the guilty men and women are not to be found in the Treasury.'

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