Houses, markets, asset-strippers, and Ireland

[Tuesday]

Bad news:

UK house prices are at least 20% overvalued compared with their long term average, according to credit rating agency Fitch.

Fitch, which judges how risky debt is, looked at how house prices have raced away from incomes over the past decade.

High levels of debt make the UK economy one of the most vulnerable in the world to higher interest rates, it added.

Out of 16 countries examined, the UK economy was the third most sensitive to higher interest rates, Fitch said.

More bad news:

European markets were broadly flat after flip-flopping nervously throughout the trading day following last week’s tumble.

Fears that higher interest rates around the world will hit company profits and dent consumer spending has hurt appetite for risky assets, like shares.

But, some good(ish) news:

The way private equity firms are taxed should be reviewed, the Treasury Committee has said.

Instead of using stock markets to raise money, private equity firms buy companies using money from clients and cash borrowed from banks.

In their interim report, the MPs said that HM Revenue and Customs (HMRC) should look at whether the tax system unfairly favours the use of debt.

The committee will resume its hearings when Parliament returns in the autumn.

The most controversial area of tax on private equity is the tax on the “carry”.

Private equity executives pay taxes on their basic pay and bonuses, but a large part of their income comes from carried interest – the carry – which is the 20% slice of profits they can claim once they have paid back their investors.

This money is classed as a capital gain and, as such, is subject to a tax level of 10%.

Critics say it should be charged at a normal tax rate.

Domicile status

The committee has also called for tighter monitoring of private equity bosses claiming non-domicile status.

The Treasury launched a review of the domicile rules in 2003 and the Committee asked for an update on its findings.

“Given the apparently rising number of the non-domiciled, and a perception that monitoring of the status of non-domiciles is weak, it is essential that the Treasury and HMRC are able to demonstrate that they have a rigorous approach towards claims of non-domicile status,” the report said.

The domicile laws allow people who do not live in the UK certain tax privileges even if their business is conducted there.

It has been reported that as many as 80% of partners in top private equity companies have claimed non-domicile status.

Buyout ‘risk’

The committee also expressed concern that private equity buyouts could be risky for the economy because they increase the proportion of debt, or leverage, in companies.

“Higher levels of leverage are likely to create additional risk, and that this becomes more significant the more important highly-leveraged firms become in the economy,” the report said.

“We also note that the recent increase in the number of highly-leveraged private equity-owned firms has occurred during a period of economic growth and stability, which is not guaranteed to continue,” it added.

And finally, really good news:

The British army’s operation in Northern Ireland will come to an end at midnight on Tuesday after 38 years.

Operation Banner – the Army’s support role for the police – is its longest continuous campaign in its history with more than 300,000 personnel serving.

[...]

From Wednesday, there will be no more than 5,000.

[...]

It is intended that the soldiers based in Northern Ireland in future will be deployed in foreign trouble spots, not the streets of Northern Ireland.

Hopefully, not even in the so-called trouble spots, which are in truth, other occupied territories. And I note the use of “intended”, leaving the door open for the return of British troops to the streets of Ireland. Well, they haven’t left yet, have they?

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Gordy goes to Washington

[Monday]

Don’t call me Dave
Forget about David Cameron. Okay, he’s trailing in the polls by eight or nine points, his own MPs are mouthing off about him – Graham Brady, who quit the frontbench over Cameron’s stance on grammar schools, for one – and columnist Peter Oborne has raised the possibility that it could be game over for the Tories if Cameron leads them into a fourth consecutive election defeat.

So, the man who was built up by the corporate media now finds himself the subject of ridicule. No ideas, no direction, and no hope. Cameron has an uphill struggle: to convert his party, to beat Brown as a leader. See, Brown has a head start – he’s been crowned without an electoral test. As the current PM, he just has to keep his place at Number Ten, Cameron must prove himself – this is the expectation.

Cameron says he won’t waver, despite criticism he lacks appeal in Midlands and North of England. He is now compromised. If he does another U-turn and obeys the wishes of his party, he looks weak because he swore against it; yet if he soldiers on, more and more detractors will speak against him, and the perception will be of a party in disarray.

The discourse for Cameron is proving that his party has changed. Will Brown be held to his change of relations with US? No, not likely – here we are in realpolitik mode and the media won’t be pressing him on this “change”.

Most unwanted!
We know who Gordy is, don’t we? He tells us often enough. He is change. Well, he doesn’t smile as easily as Blair. He’s a bit awkward, a tad scruffy. It is a change of style, but not substance because nothing has really changed.

No change in relations with the US: we should be grateful for the most powerful empire ever to exist, says Brown. No change in government attitudes towards industrial disputes: the posties – and all other workers – must accept a pay cut to hold off inflation, says Brown. (Presumably he doesn’t want the bosses to accept lower profits and reduced bonuses…)

Why isn’t Brown trailing in the polls? Are they meaningless? How can a man to take over as PM with no election, change only one or two of hundreds of massively unpopular policies, invite generals, coppers, and bosses into government and remain popular?

The answer is, of course, that he is not popular. Remember – these opinion polls are of voters. People who say they will vote in a general election. Not exactly a supermajority of the population; of which, a few thousand are asked to give their opinion. So taking an opinion poll is not the same as taking the pulse of the nation(s).

Severe flooding causing billions of pounds worth of damage to homes and businesses; an ongoing postal strike; deaths and casualties of troops fighting illegal and immoral wars in the Middle East – Brown doesn’t want to talk about this.

No, the flag! The Union flag is Brown’s priority (he’s British, you know!). The butcher’s apron is to be flown all year round from government buildings – but not in Scotland or Northern Ireland.

And terror – Brown is set on doubling the 28 day internment to 56 days, insisting it is needed despite the lack of evidence. It’s partly party political, it lets him out-tough the Tories, but for the most part it serves the interests of the ruling class, who will need such laws on the books should the tide turn on a mass scale.

Right now, Brown’s meeting with George Bush is in the news. What did he mean by “full and frank”? Was he displeased at Bush’s lap of honour in the golf cart? My big talking point is this: considering UK service-personnel are dying in immoral, illegal, and unpopular wars of occupation in the Middle East, what impact will Brown’s commitment to the “special relationship” have on his own reputation?

Independence thirst?
On Scotland, Brown’s abandoned homeland, the head of the Scottish government intends to publish a white paper on an independence referendum within the next two weeks, to mark the SNP’s first hundred days in power.

It won’t be easy to bring forward a referendum: the Scottish Parliament is packed with members of the Westminster parties, and the unionists are dead against giving the Scottish people a say on the future of their nation. If it is true that over a third of MSPs are in favour of independence and that there is not sufficient public support for an independent Scottish state, then the unionists should call Salmond’s bluff and back a referendum wholeheartedly.

Scottish independence is a big deal for socialists in England; we cannot let English national identity become purely defined by feelings of antagonism towards Scotland. The asymmetrical devolution carried out by New Labour is resulting in a resurgence of the English national identity, discrete from that of British “national” identity offered by the ruling class. Socialists should support the Campaign for an English Parliament and socialist bloggers should join the Witanagemot Club.

There is one other factor besides the issue of national self-determination, it must be said. For if it is true that Britain is the most important ally of the US, the world’s number one imperialist power, then it is our duty to break the Union into its component parts, thus weakening Anglo-American imperialism and at the same time fighting for change in the interest of the working class.

Plus ca change…

[Sunday]

This does not require commentary. What more can be said?

Gordon Brown today flies to Washington for his first summit with President George Bush, after issuing a ringing endorsement of Britain’s ‘special relationship’ with the US.
As he prepares the Labour party for a possible election next spring, the Prime Minister attempted to neutralise the divisive issue of the transatlantic alliance with a declaration of where Britain’s interests lie.

‘It is in the British national interest that the relationship with the United States is our single most important bilateral relationship,’ the Prime Minister said in remarks that are designed to make it clear that Brown will not abandon the Atlantic alliance for cheap electoral gain.

Brown’s unequivocal declaration, as he prepares to hold his first talks as Prime Minister with President Bush over dinner at Camp David, is a strong signal of his determination to maintain the Atlantic alliance, after Washington had been alarmed by what it saw as mixed messages from London.

Lord Malloch Brown, the Foreign Office Minister, had said that Britain should no longer be ‘joined at the hip’ with America.

While Brown sends warm signals to Washington, he is unlikely to personally align himself so closely to Bush in the way Tony Blair did. The Brown camp knows that the perception of Blair as Bush’s ‘poodle’ was a key factor in undermining the former Prime Minister, which in turn damaged Labour in the polls.

Brown has spent the past month attempting to wipe out such negatives as he prepares the ground for the next election. At a special political session of the cabinet at Chequers on Thursday ministers agreed that Douglas Alexander, the election co-ordinator, would place the Labour party on an election footing.

Ministers discussed the possibility of calling an election as early as this autumn to exploit the ‘Brown bounce’ in the polls. The Prime Minister believes it would be wrong to call a snap election because he feels it is important to prove to voters that he can deliver change.

But a spring election next year looks increasingly likely after ministers heard a glowing report based on Labour’s private polling. There is also concern that Brown should act quickly before a feared economic downturn.

The cabinet was told that all the negative aspects about Brown – that he was seen as scruffy, a plotter after last September’s mini coup, as well as a divisive figure – have now been replaced by positive views, as he is seen as a serious figure who is uniting his party and who dresses well.

However, David Cameron’s ratings have headed in the opposite direction, according to Labour’s polling. Positive views about him – that he was likeable, young and energetic – have been replaced by negative views that he is shallow and addicted to spin. Ministers were told that these views are beginning to harden.

Key members of the Brown camp believe they have arrived at what they are describing as the ‘West Wing moment’ – the scene in the US television series where President Bartlet’s aides wait to learn whether voters think he is a strong leader as he delivers the annual State of the Union address. Brown is polling strongly on that score, in contrast to Cameron, whose leadership ratings have dropped after the grammar schools row.

Brown made clear he is an ardent Atlanticist when he said no major global problems could be solved without the US. ‘We know that we cannot solve any of the world’s major problems without the active engagement of the US. And just as Britain and America have always stood side by side in tackling the great global challenges of the past, so we will continue to work very closely together as friends to tackle the great global challenges of the future.

‘The relationship between an American President and a British Prime Minister will always be strong, and I am looking forward to my meeting with President Bush to discuss how we can work together to meet many of the great challenges we face.’

Brown and Bush will meet over dinner tonight at the presidential retreat of Camp David, where they will discuss Iraq, Iran, Afghanistan, the Middle East peace process and climate change. Brown is also set to meet Ban Ki Moon, the UN secretary-general, tomorrow in New York. [Emphasis added.]

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Volatility

[Saturday]

A wonderful editorial in The News Line today. Entitled SHARES CRASH AS DEBT CRISIS EXPLODES, it goes like this:

In London yesterday, the FTSE 100 rebounded momentarily, but then fell back into the red, down by 48.5 points by 1pm after a 200 points plus fall knocked 3.2 per cent, that is £40 billion, off share prices on Thursday.

On Thursday night the circuit breakers came into effect on Wall Street to stop the exchange melting down after a 311.5 points and 2.3 per cent collapse in shares prices.

In Asia, the Wall Street slump on Thursday led to Japan’s Nikkei average closing down 418.28 points, or 2.4 per cent, at 17,283.81, while Hong Kong’s index ended 2.7 per cent lower.

The law of value is now working overtime destroying the pieces of paper credit of all kinds that has been able to masquerade as value, that is as money, which under capitalism is gold.

Gold is now expected to move rapidly upwards from its current price of $668.15 an ounce (21 times the dollar price of gold in 1971, when the dollar was as good as gold, at $32 an ounce.

US production is gripped by a slump with its huge engines (GM, Ford, Chrysler) stalled and being broken up, and with the US economy importing over $500 billion more commodities than it is exporting.

US bosses are savagely lashing out at industrial workers, demanding huge cuts in wages and an ending of their responsibilities to provide health care and pensions as part of union contracts.

US car sales are down and the massive inflation of oil, along with many other raw material prices has seen the cost of living being driven up in the US, where the minimum wage is less than £3 an hour.

The rise of poverty has undermined the dodgy sub prime mortgage market. This has now collapsed, along with a number of banks and mortgage companies creating the conditions for Thursday night’s huge falls in share prices.

The US being bogged down in Iraq and the colossal expenditures, risks and dangers involved, guarantees a continuing rise in gas and oil prices and worldwide inflation.

The response is rising interest rates and the end of cheap credit, bringing with it bankruptcies, financial collapses, and the beginning of the end for the equity capitalists, as their cheap credit bubble explodes in their faces.

In the US investors are bruised by their losses in the mortgage markets, and are now refusing to buy risky loans from the banks, torpedoing the credit mechanism needed for the speculative and inflationary take-overs which has been behind the huge rise in share prices.

Huge rises are now about to be replaced by even bigger share collapses.

Within the stock markets, bonds have rallied, with investors looking for assets that could guarantee them steady, and relatively safe returns.

However, Cadbury Schweppes has extended the deadline for offers for its US drinks business because of turbulence in the debt market.

Earlier in the week, banks involved in the buyout of Chrysler also could not find buyers for the $12 billion of debt involved.

Apax Partners and Permira have also had to scrap their plans to refinance the High Street fashion retailer New Look.

Paul Maloney, GMB National Secretary for GMB members working for the AA said: ‘Today’s report that the AA/SAGA merger is under threat, as the banks fail to find additional underwriters for the £4.8 billion debt, will come as no surprise to GMB members.

‘GMB has been pointing out that each of the 11,000 members of staff would have to carry borrowing of almost £400,000 per person and that the interest payments per annum per employee would be almost £30,000.’

Boom is leading to a classic bust of mammoth proportions, where capitalism is unable to develop the productive forces and moves to destroy them through slump and wars.

And I must start ending posts with a rallying cry:

The only answer to this crisis is the organisation of the socialist revolution to expropriate the bosses and bankers and replace the capitalist law of the jungle with planned production for people’s needs, based on the nationalisation of the means of production.

Ah, yes.

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On the slide?

Consider the following:

Stock markets have fallen worldwide amid concerns about the effect of higher global interest rates on company profits, takeovers and loan defaults.

The US Dow Jones index lost 311.5 points, or 2.3%, to 13,473.57, while the S&P 500 shed 2.3% to 1482.66.

In London, the FTSE 100 closed 203.1 points, or 3.2%, lower at 6251.20.

Many indexes have been trading at their highest levels in recent years, buoyed by low rates that fuelled high levels of consumer and corporate spending.

The concerns are nothing new, and analysts and investors have been warning that a number of factors are combining to create worrying conditions for equity and credit markets.

[...]

Over the past few years there has been a boom in company profits, house price increases, and mergers and acquisitions.

Driving this have been low interest rates that have made it cheap for companies and consumers to borrow cash and finance purchases.

That period of cheap cash now seems to been coming to an end with central banks worldwide, including the Bank of England, raising their main rates to slow stubbornly high inflation.

At the same time, oil prices have climbed raising fears that inflation could also pick up again because of the higher energy costs.

Everyone is looking anxiously at the US economy, in particular the housing market.

Sales of existing homes in the US during June fell to the slowest pace since November 2002, giving no sign of an end to the housing slump.

Sales fell 3.8% in June to a seasonally adjusted annual rate of 5.75 million homes.

Figures from the National Association of Realtors also showed that the median price paid for a home rose 0.3% compared with June 2006 to $230,100.

It is the first such increase in average prices for 11 months.

“The past few months have indicated that a bottom has not been reached, which is negative for the economy,” said Richard Dekaser, chief economist at National City Corp in Cleveland.

Workers World has a good article on the crisis:

On July 24 the largest mortgage company in the U.S., Countrywide Financial Corp., reported that its second-quarter losses were much worse than expected and that problems in the subprime mortgage sector reported earlier were now spreading into the prime mortgage market.

Prime mortgages are those loans made to borrowers with solid credit histories. Delinquencies in this area are rising, indicating that the much-discussed problems in the subprime sector were just the first phase of a larger capitalist crisis.

I am reluctant to predict anything from this latest news, like the total collapse of the US economy, as we have been here before. Recall that in 2002, plans were afoot to invade Iraq. And now, five years later, with Blair gone and Bush at his least popular, what chance another war in the Middle East?

Perhaps the prostpects of war are becoming less likely:

Iranian foreign minister Manouchehr Mottaki said Iran would consider meeting the US at deputy foreign minister level, if the US suggested it.

The US and Iranian ambassadors to Baghdad met on Tuesday.

It was only the second direct meeting between officials of this level in almost three decades.

At the meeting, both sides blamed each other for the violence in Iraq.

The US accused Iran of increasing its support for militia groups in Iraq in recent months, but Iran has denied this and said Iraqis were “victimised by terror and the presence of foreign forces”.

However, the two sides did agree to form a security committee, with Iraq, to focus on containing Sunni insurgents.

It would be hard to justify an attack on Iran, let alone a full-scale invasion, so the Empire will stick with rhetoric. What chance a well-timed terrorist attack in the US, with Iran being blamed?

Just asking…

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Thatcher & sons

[Thursday]

Last night I watched the documentary Tracking Down Maggie by the inimitable Nick Broomfield. The film, made in 1994, concerns the attempt by Broomfield to secure an interview with Margaret Thatcher, the former British Prime Minister, as she tours the world promoting a book about her time in power.

Alongside this chase by Broomfield is an exposition of the early years of Thatcher, her relationship with her two children, and most importantly, her connections with the arms industry. Not just her connection, her son Mark was (and is?) heavily involved also – and this is years before he got entangled in attempted coup d’etat – and was perhaps involved in the sale of arms to Iraq.

The film has a rather slow pace – indeed, there was a premature voice-over by the announcer, informing the audience of the programme to follow – but I don’t think it has dated too much, despite the absence of Mark Thatcher’s latter troubles with the law in South Africa. Broomfield cannot be blamed for not including future events, but if ever he has the time to update the film, I hope he is able to include footage of Carol Thatcher eating the genitalia of a kangaroo. The cheap shot would be that clip of her pissing in the jungle, but I don’t dislike the woman, and neither does Broomfield, so I hope he lets it slide.

For a bit of background, Broomfield interviews Christopher Hitchens (ahem) who seems to be completely sober, before he opens his mouth, and Francis Wheen (ahem again) who cannot sing to save his soul, may God bless it, though he can tinkle the ivories well enough. The Hitch delivers an anecdote about Thatcher’s sexiness – early evidence of his alcohol problems – and Wheen sings the song of his old school, which he attended with Mark Thatcher.

The appearance of these two ex-leftists amused me. They were leftists at the time, I suppose, though it is such a slow transition that it is hard to demarcate accurately. The Hitch went on to become a fan (and drinking buddy?) of George W. Bush and a keen supporter of the US-led invasion and occupation of Iraq, Wheen has been a little more cautious in this respect – by which, I don’t think he’s actually given the numbskull a pep-talk. Wheen lost my favour (not that he’d be all that bothered) when he came out in support for the “humanitarian intervention” in the former Yugoslavia; nowadays he flirts with the cruise missile left, which is grouped around the Euston Manifesto.

I am not aware if Wheen is still an adherent of Karl Marx, and to be honest, I do not care to find out. He wrote a book on Das Kapital not so long ago, which leads me to suspect he has some remaining interest in Marxist economic theory, but if I recall correctly he loathes Lenin, and so does not care much for imperialism in theory, though he does like the praxis.

Hitchens is now to the right of his brother Peter, who is a Christian traditionalist, and an opponent of the wars in the Middle East. It was the older brother who led young Peter into the Socialist Workers Party, and probably marched him out again. The experience has made no positive impact – Peter is a Tory and Christopher is a wino. Let it be said that I have great respect for Peter these days; he seems a lot saner compared to his elder brother, opposing as he does the wars, the police state measures, and the creation of a centralised European state.

In the documentary, Broomfield highlights the pride which Thatcher has in her spearheading of the Falklands’ War, and fits it into the narrative of the increased productivity and profitability in the arms industry. He fails to contrast this huge growth with the rest of the manufacturing industry, which has been in managed decline for the last three decades. As John Pilger stressed in his documentary on the arms industry, the Tories oversaw the militarisation of the British economy in the eighties.

This trend continues: Des Browne, the Defence Secretary, announced the purchase of two new aircraft carriers yesterday; costing £3.8bn, the construction of the vessels will secure and create a total of ten thousand jobs. These are the figures alleged by New Labour, of course, and thus should be taken with a handful of salt. Another tough and populist announcement was Gordon Brown’s the creation of a border police force – this was debunked immediately, as there was no announcement of additional officers to make up this new force.

The linkage of “defence” and employment does not wash, though. For example, witness the unanimity of opinion against the renewal of Trident in Scotland, despite its supposed employment opportunities. Just as there is no appetite for the revival of military conquest by Britain – to the contrary, support is growing for the disbandment of the British state – few but the defence contractors are keen on a helping of aircraft carriers, no matter how large.

Most people consider that it is far better to concentrate on reviving the productive economy rather than boosting the destructive economy, which is already obscenely bloated.

Brown proves that he is but a physical change from Blair, for the same policies remain in place on a whole host of issues; there was never any chance that Brown would “lurch to the left”, or even meander away from the right by accident. Okay, the super-casinos are out and Brown’s seeking fifty-six rather than ninety days detention – but is that a real change?

Groups and individuals call vainly for a new approach. Yesterday the Federation of Small Businesses called upon the government to intervene in the postal strike, alerting the world of the knock on effects of disrupted services as private sector mail companies are not interested in SMEs. I would support action by the government, on the side of the postal workers, naturally – but this is as likely to happen as Blair being carried through blissful crowds in the West Bank and Gaza.

The government sees the dispute with Royal Mail as key to ensuring that wage demands are kept lower than inflation – as Brown says, “pay settlements must tackle inflation” – and that the Post Office is privatised. Meanwhile, Royal Mail chairman Allan Leighton has been secretly planning to buy BHS, the department store of which he is also chairman; still, Leighton must be hard pressed by inflation, if he has to do more than one job…

Brown doesn’t care about the forty thousand postal workers who will be sacked under the suicidal business plan of the Royal Mail mismanagement; he only mentioned the number of jobs created by the purchase of new arms carriers because they have no other practical use for working people. The strength of support for a public postal service can be gauged by the Department of Work and Pensions, which dumped Royal Mail in favour of UK Mail earlier this year.

Pinching the posties’ pensions?

[Tuesday]

Here’s some food for thought on the eve of the postal workers’ strike:

THE MAIL PENSION ROBBERS
EXCLUSIVE: Secret Royal Mail plan to axe final salary scheme..and save £1.5billion

By Clinton Manning Business Editor 24/07/2007

ROYAL Mail workers will have their pensions slashed unless they work five years longer under secret plans revealed by the Mirror today.

The move would cost staff members thousands of pounds a year. Some could see their retirement pay halved.

In addition the posties’ final salary scheme would be closed to new members from next year.

Last night, on the eve of two weeks of pay strikes, union leaders vowed to fight the “hammer blow” proposals.

Dave Ward, deputy general secretary of the Communication Workers Union, said: “This is a savage attack on pay and conditions.

“Our members aren’t going to roll over and accept this. It will only galvanise support for strike action.”

The radical plans – which would hit workers at Royal Mail, Post Office and Parcelforce Worldwide – are in a 24 page document leaked to the Mirror.

They are designed to tackle a £6billion shortfall in the pension fund by saving £1.5billion over five years.

The age staff could retire with full pensions would be raised from 60 to 62 next year and 65 from 2010.

Future rises in pensionable pay would be capped at the inflation rate.

Lump sum payments would also be hit. A worker aged 50 today with 30 years’ service could have expected a one-off payment of £29,826. This would be cut to £25,515.

The document says: “These changes would gradually reduce Royal Mail’s overall pension costs and therefore reduce the future risk to our business, jobs and existing pensions.”

It stresses that no decisions have been made and the proposals are to form a basis for consultation. But it also says keeping the existing scheme is not an option.

Many companies have closed final salary schemes to new recruits, including BT, BA, Barclays and HSBC.

But few have taken such punishing action against existing employees, hitting 167,000 workers in one go as Royal Mail are doing. Firms to have taken such a step include Rentokil, ITV, Yorkshire Bank and the Co-op.

Mr Ward said: “It’s a stitch-up. They may say they’re consulting but that’s a charade. It’s clear from the work in producing these plans that they’re determined to drive them through.”

The Royal Mail pension scheme is one of the UK’s biggest with more than 450,000 members.

Existing pensioners and senior management would be unaffected.

Union leaders blame past management for the black hole in assets.

For 10 years bosses took advantage of the right to a “pensions holiday”, paying nothing into the scheme.

Royal Mail, which has recently lost a string of contracts, said: “There is no formal proposal yet in play.”

YOUNGER WILL BE HIT WORST

WHILE all staff will suffer as a result of the changes, younger workers who have joined the business since 1987 will be the biggest casualties.

A 30-year-old with 10 years’ service could currently expect to retire with a pension of £15,260 a year.

This would be slashed to £8,764 if the proposals were pushed through.

A new recruit starting at the age of 20 would expect a pension of £17,186 when he retired.

This will plunge by more than half to just £8,575 according to Royal Mail’s own figures.

Older workers, who joined before 1987, would be less severely hit as the money they have already paid into the scheme would be protected.

So a worker aged 50 today with 30 years’ service who would have retired on £9,942 a year would see that cut to £8,505.

MANNING’S VERDICT

THIS plot to swipe big chunks of posties’ pensions is a shameful disgrace.

When workers join the business they sign up to a life of hard graft. They must be prepared to get up at ungodly hours in all weathers to get the mail through.

They know they will not earn a fortune. But, until now at least, they could look forward to a reasonable retirement at 60.

Now management are threatening to rip up their side of that bargain.

This is not simply a kick in the teeth for workers. It is also a betrayal of the duty of care to the public.

Bosses cannot hope to provide the efficient service they need to compete with rivals if workers’ morale is rock bottom.

Staff are already hugely hacked off by attempts to force them to accept a below-inflation pay rise worth a paltry £8-a-week before tax.

Tempers are going to be even more frayed – and support for the fortnight of strikes more solid – when staff learn of the latest outrageous plans. [Emphasis added]

Well, all I can add is that this strike is of vital importance, and I urge you to support your postie over the next few weeks.

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