Pensions: Thatcher’s vision is coming to fruition

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Society is indeed a contract. It is a partnership…. not only between those who are living, but between those who are living, those who are dead, and those who are to be born”  Edmund Burke, Reflections on the Revolution in France 1790

Pensions: Thatcher’s vision is coming to fruition by Prue Plumridge

At the end of last year the Institute for Public Policy Research published its ‘Future Proof report’. It painted a bleak picture for British citizens by 2030.  It suggested that, unless solutions were sought, an ageing population would place a huge and unsustainable burden on the public coffers.

In 2013, The Intergenerational Foundation published the results of a survey of 50 of the UK’s leading thinkers on economics which was entitled ‘Can the UK afford to pay Pensions?

The growing national debt and pension liabilities either to public sector pension schemes and the state pension were cited as reasons to seek solutions to the so called ‘demographic burden’ of an ageing baby boomer population.  The report suggested that these liabilities would be a considerable financial burden which future generations would have to pay off through their taxes.

In 2014, the Institute of Economic affairs also added its warning by claiming that future generations could be ‘short-changed’ and the public finances put in jeopardy unless the UK takes serious measures to reform the state pension system.  Clearly there is no shortage of organisations and politicians ready to pitch in to reinforce this message.  To that end, Sir John Cridland, former CBI Director General, is due to publish an interim report early this year aimed at ‘ensuring the state pension remains affordable’.

In response to these fears, changes to the pension retirement age are already in progress and, whilst it is currently set at 66, it has been suggested that the Department of Work and Pensions may have plans to increase it further to the age of 70.  Furthermore, the Chancellor Philip Hammond has hinted that after 2020 state pensions may no longer be ring-fenced from spending cuts.

Added to these messages of unaffordability there is also something far more insidious going on.  In Australia, a crossbench senator recently said that ‘taking the pension shouldn’t be something you aspire to, it should be something you try to avoid because it signifies you’re in a low-income group’.  He suggested that payments be viewed as welfare not an entitlement.  Right wing ideologies which promote the primacy of the individual over that of the well-being of a wider community have led to an emphasis on individual responsibility which has, in turn, led to the shaming of those who find themselves on the wrong end of the economic stick.  The inference is that if you’re poor, unemployed or sick then you only have yourself to blame.

The political discourse is making it clear now that pensioners are not only about to be added to this list but also perhaps even condemned for not having saved sufficiently to pay for a decent retirement.  Even the prospect of retiring is no longer sacrosanct.  The Tory peer, Baroness Altmann, tweeted last year that “private pension/health will drive retirement age” thus suggesting that unless you’ve got a big fat private pension or health insurance you can forget retiring on a state pension because it simply will not pay enough to cover your costs.  Clearly retirement is intended to become the privilege of the rich and well heeled.

Citizens face the prospect not only of a two-tier health and social care service but also a two-tier pension entitlement – one for those who can afford to save for one and one for those who can’t which may condemn people to working beyond retirement just to survive.

As Peter Fleming recently wrote in an article in the Guardian:

“We can trace the untimely demise of retirement to a number of assumptions about how society ought to be organised.  At no other time since its inception has the welfare state been so hated by the governing elite.  Social care.  Unemployment assistance.  Health.  Local councils and libraries.  Municipal parks.  Anything relating to what used to be called “the public good” is attacked at the roots.  Austerity redefines these things as fiscal liabilities or deficits rather than shared investments in common decency.  It was only a matter of time before pensions too were put on the chopping block”.

Of course, it might also be said that things are not looking favourable either for those who are paying into private pensions.  Not only have many defined benefit pension schemes been closed and replaced with pensions linked to the uncertainties of the stock and bond market but also in a new development the government has recently announced a consultation paper which could take thousands of pounds of income away from 11 million retirees.  This means basing annual increases on the consumer price index rather than the retail price index.  The paper also suggests that where a company is facing significant financial pressures it could suspend increases altogether.  In the heady days of market superiority private pensions might have been all the rage but in these cash strapped times and market uncertainty the gloss may be rubbing off.

Whilst clearly the mainstream and ideologically inspired experts view this demographic transition as a ticking time bomb of the financial kind, I want to investigate in this article how this view has arisen and show that, because we misunderstand how our money system actually works, the argument is far from an affordability issue.

Since the post war settlement which led to the creation of social welfare provision including a state pension and free healthcare and education citizens have been bound together by a social contract based on mutual support across the generations.  That social contract is now under threat.  Young people quite rightly compare their impoverished lives with those of their post war parents and grandparents.  Lack of adequate, affordable housing, debt ridden higher education, poorer employment opportunities, low pay and lack of job security not to mention the prospect of working longer and a poverty stricken old age are all a cause for anxiety among young people who fear for their future prosperity.

Quite predictably it stirs up resentment as they perceive the older generation having very nice, comfortable lives thank you with their own homes and decent pensions!  These are advantages that the young can scarcely dream of unless they are lucky enough to have a helping financial hand from parents or grandparents. The inference is that the social contract is no longer sustainable because in the future there will not be enough young people generating tax receipts and income to fund all those things which we have come to rely on to make society decent and civilised.

At the Conservative Conference last October the current Chancellor, Philip Hammond, warned of the dangers of piling up debt for our children and grandchildren promising he would restore fiscal discipline and get Britain back to living within its means.  Georgia Gould, a Labour Councillor in North London, has even suggested that we may have to reconsider the principle of universal pension benefits in the light of the supposed financial ‘black hole’ they represent.

What should be the right ‘balance’ of public spending between the generations to ensure a fair distribution of wealth and resources is the mainstream question and is there even a future for state paid pensions?

The message that our pensions along with our social security system is too costly and unsustainable is constantly drummed into the public consciousness.  Austerity, cutting public spending and privatisation have been presented by all the main parties (until recently) as necessary to get our public finances ‘under control’.  And yet, despite the growing evidence that cutting government expenditure on public and social infrastructure has had catastrophic consequences for the nation’s overall economic well-being – fiscal discipline and paying down debt is the re-occurring mantra of mainstream economists and politicians (even if the timescale for such plans has slipped somewhat in the face of an uncertain economy).

We need urgently to challenge these claims.

It might first be worthwhile spending some time on explaining from where this narrative arose.  The Keynsian inspired post war consensus started to break down in the 1970s with the two oil shocks and resultant rising inflation and unemployment.  This also coincided with the infiltration of neoliberal/monetarist ideas into the political mindset which was to have increasingly destructive consequences on economic policy for the next 40 years.

This decade saw the death knell for post war Keynsian policies and initiated a shift away from full employment.  Labour eventually paid a high price for its management of the economic crisis and lost the election to the Tories in 1979.  Margaret Thatcher brought to the table an economic vision inspired by Friedrich Hayek and Milton Friedman and her policies reflected her belief in the superiority of the market, less government involvement and the importance of the individual.  The idea implicit in this dogma was that the welfare state deprived people of the opportunity to make their own arrangements for pensions, health and housing.

As a result, the merits of home ownership were promoted and our stock of social housing sold off, along with the opening up of the market for private pensions in an attempt to weaken the state’s own pension provision, both of which continue today.  Treasury documents released last year revealed that Thatcher also supported a plan to dismantle the welfare state and introduce private health insurance to end the NHS.

By the time Labour finally returned to power, market driven ideology was firmly entrenched in the political narrative.  Under Tony Blair’s leadership the party, with its ‘third way’ credentials, rejected its socialist roots and fostered a laissez-faire capitalism of globalised markets and increasing corporate power.

Philip Bobbitt in his book ‘The Shield of Achilles’ published in 2002 suggested that power of the nation state would, over time, lose its authority to the ‘market state’.  The ‘nation state’ he said ‘derives its power through its promise to improve its citizen’s material wellbeing, while the market state is legitimised through its promise to maximise its citizens’ opportunities.’ To put it simply the centralised state has indeed been replaced by a market state orthodoxy which is fragmented and outsourced. In short, public money is being poured into the coffers of global companies to run public services for profit.  It is a place where, it would seem, the term ‘public purpose’ has its narrowest meaning.

Following the Global Financial Crash when Labour with some success flirted for a short period with Keynes, the Tories returned to power in 2010 to reinforce the corporate dominated, revolving door politics of the past decades.  And, on the basis of an incorrect accusation of Labour’s overspending, began their attack on public services, the NHS and social security peddling the cruel mantra of ‘we must live within our means’ in justification.

However, the increased poverty, inequality and insecurity can be attributed not to previous governments overspending or living beyond their financial means but rather a pernicious ideology which has put increasing the wealth of the few above the well-being of society and raised the status of the corporations to gods.

Politicians aided by a self-interested press, corporations and the wealthy have convinced the public that the state finances are like their own household budgets and that the national debt and deficit are dirty words.  We have to cut expenditure to get our public finances in order to prevent burdening future generations with debt and higher taxes is an oft repeated message in the media.

So, is it true that by borrowing now we are burdening future generations?  The short answer is NO and is indeed illogical.  We should be challenging such a distortion and indeed presenting the real facts about how our money system works in practice.

The economist, Professor Bill Mitchell rightly points out that past and current policy decisions do affect young people today and will also affect future, yet to be born, generations.  However, as we have seen this has been presented by politicians and think tanks in terms of financial affordability – whether there is enough money in the public pot to continue paying for social security, the NHS, public services and education both now and in the future.

Deficits and public debt have become society’s bogeyman which has proved a very useful myth to justify continued public sector cuts and privatisation thus serving the pursuit of a political ideology rather than any sort of economic reality.

We are regaled endlessly with the message that fiscal discipline is vital if we are to maintain a healthy ‘bank’ balance, save for a rainy day or avoid bankruptcy.  Of course, that would be true if the State’s finances ran like our own household budgets where our expenditure is limited by our income.  However, this may come as a shock to some but in a post gold standard world government spending is not constrained by the taxes we pay.

For an explanation, we must look at how a sovereign, currency issuing government like ours actually operates.  As Professor Bill Mitchell points out:

“The fact is that the current government has as much ‘money’ now as it had yesterday and the same amount, it will have tomorrow.  That is, it has whatever it wants to spend.  It always has that.  It has no more or less capacity to spend today because there were surpluses in the past than it would have if there have been deficits in the past.“

“Borrowing” doesn’t take any money at all from the pockets of future taxpayers and baby boomers (like myself) have never been asked to pay back a single penny of the public ‘debt’ accumulated by their parents’ generation.  Indeed, those fiscal deficits created public assets and infrastructure from which we have all benefited. Those terms debt and borrowing are loaded words which fit very nicely with our understanding of how our personal finances operate in practice in a Wilkins Micawber sort of way.  However, in terms of a sovereign state issuing its own currency it bears no relationship to our own household budgets.  The funds that pay for bonds or what is called ‘borrowing’ began life in government spending.  So, when economic experts and politicians refer to debt clocks claiming that we are sinking under its weight and we cannot afford to burden future generations we need to take a step back and look at it rationally.

If the government is the currency issuer then as Professor Mitchell points out, it is in fact, only ‘borrowing’ its own spending back.  So how on earth can we be said to be ‘borrowing’ from the future?

As Paul Segal, a senior lecturer in economics noted, the debt is ‘the money the government owes us, not money that we owe to anyone else. […..] What is called the ‘national debt’ is our own savings, looked at the from other side of the balance sheet”.  And how does it get there?  We put our savings into banks and pension funds which are then invested by those same banks and pension funds when they buy interest bearing government bonds, which include premium bonds by the way,from which investors and retirees then enjoy a return as income which is either saved or spent into the economy. In short, if you’re worried about the national debt then you should do the decent thing and stop enjoying the proceeds of your investment savings.

Furthermore, and fundamentally, as Bill Mitchell highlights ‘Every generation chooses its own tax rates. That is, the mix of public and private sector involvement in the economy is a political choice’  The key word here is choice.  Governments make policy choices related to the particular politico/economic ideology they espouse and for the last forty years and more that choice across the political spectrum has been neoliberal and market driven.

The result has been more about redistribution of wealth upwards than ‘trickle down’ and this has been at the expense of ordinary working people.  As the economist, Ellis Winningham recently noted: ‘The rich have been robbing us’.

Oxfam reported in January that runaway inequality has created a world where 62 people own as much as the poorest half of the world’s population.

The idea that government policy should serve public purpose aims as it did during the post war years for the economic well-being of a nation has largely been abandoned in favourof the rise of a deregulated corporate driven state whose hallmark has been excessive greed.

When those on opposition benches take the government of the day to task for rising debt and increasing deficits as if these were signs of poor economic management, the public are quite understandably horrified at government’s apparent wastefulness – how that suits the orthodox agenda!  The debt and deficit are, however, largely misunderstood by the public, and politicians either take advantage of that confusion to be better able to justify ideological austerity, cuts and privatisation or simply don’t understand that their own knowledge is flawed.

In short, deficits (i.e. the difference between what is received in taxation and actual government spending) are neither good nor bad in themselves – they are more of an economic indicator of whether a government is doing its job effectively or not.  Thus, the success or failure of an economy will depend on whether there is an appropriate level of government spending to ensure full and productive employment.  Historically, fiscal deficits have in fact been an enduring feature of post war economies and are, in the words of the economist Dr Steven Hail, ‘normal and necessary’.

Indeed in 1982 Gardner Ackley wrote:

“My own position on deficits has always been, and remains, that deficits, per se, are neither good nor bad.  There are times when they are not only appropriate but even highly desirable, and there are times when they are inappropriate and dangerous.  During a recession or a period of “stagflation”, deficits are nearly unavoidable, and are likely to be constructive rather than harmful.”

…It is not the government’s role to run deficits or surpluses. We want governments to make policy choices that will maximise the potential of the people to enjoy their lives and contribute the best they can, given their own circumstances to the well-being of society and the planet.

We might call this goal one of public purpose.  An essential element of that goal, given current cultural mores in most nations, will be to ensure that everyone who wants to work has a job and for those that are unable to work, for whatever reason, have adequate income support so they are not alienated and socially-excluded.

When Labour came to power after the second world war the aim of Clement Atlee’s government was to create a more stable, fair and less exploitative society than had been the case before the war.  Fiscal deficits were an enabling factor in achieving this.  Our parents and grandparents didn’t whisper in corners about government wasting money or talk about how governments should be fiscally sound they understood its role in making their lives better.  We have all benefited from that wisdom and foresight even if we have increasingly forgotten that, over the last few decades, as market and monetarist orthodoxy has replaced a public purpose vision which benefited citizens through access to publicly paid for health and education, decent housing, public services, social security (including pensions), redistribution of wealth and a focus on full employment.  We neither went bankrupt then creating a fairer society and nor can we do so today no matter what those that claim to know try to tell us.

The idea that we can no longer afford such a vision because we can’t afford it is one of the biggest inventions of our time and one that will continue to impoverish society if we let it.  So, in the same way as our parents and grandparents understood the importance of government’s role in investing in better lives for themselves and for their children we must embrace that same understanding and reject the paltry arguments of orthodox economists which has led to increasing poverty and inequality through a casualised labour market, wage suppression and attacks on trade unions all to support global trade, an emphasis on a largely unproductive finance sector and the politics of austerity.  There is an alternative to this miserable economic narrative which wants us to believe that governments are financially constrained and all it requires, is for us to challenge those who tell us there isn’t one.

Fundamentally a healthy economy is dependent on a healthy and educated population which is not driven by fear of want.  The social security system including state pensions, the NHS, public services and transport networks are all necessary to the good working of society and a nation cannot function properly without the vital infrastructure which underpins a strong economy.

So, if a sovereign state like ours which issues its own currency, is not constrained by taxation, cannot run out of money, go bankrupt or burden future generations, are there any real constraints to government spending?  There are certainly caveats which relate to resource availability whether that’s raw materials, goods, services or human labour.  Money is not finite but resources are whether they are human or otherwise.  To quote again Gardner Ackley:

“That goal is constrained by the availability of real resources that the nation commands – labour, capital, land, etc – but not by the financial capacity of the currency-issuing government.”

Whilst this generation cannot burden future generations with higher taxes or debt burden we have to recognise that there are limitations related to consumption of finite resources and that the resulting damage to the environment will diminish the prospects for our children’s children and beyond.  This is perhaps the most pressing problem of our times which we must reflect on urgently.  Therefore, the onus on this generation and its elected governments is to do two things: firstly to commit to investing in our young people over the long term to ensure that they can be employed in productive well paid jobs to serve the needs of future generations including the retired; and secondly but more importantly we have a responsibility to ensure that we actually have an environmentally sound planet to bequeath to our grandchildren and their children.

We should be clear that the current government has made an ideological choice instead to impoverish future generations by cutting spending and all for ideological reasons that have nothing to do with the well-being of society today or in the future.

References

http://www.ippr.org/publications/future-proof- britain-in- the-2020s

http://www.if.org.uk/wp-content/uploads/2013/02/Can- the-UK- Afford-to- Pay-

Pensions.pdf

https://iea.org.uk/publications/research/the-government- debt-iceberg

https://www.gov.uk/government/news/john-cridland- cbe-launches- consultation-on-

the-state- pension-age

http://www.bbc.co.uk/programmes/b086t0mb

https://www.theguardian.com/commentisfree/2015/oct/24/young-bear- burden-of-

pensioner-prosperity

http://www.abc.net.au/news/2017-01- 02/david-leyonhjelm- calls-to- restrict-pension-

assets-test/8157924

https://www.theguardian.com/commentisfree/2017/feb/14/wealthy-retire- austerity-

pensioners-work

http://www.telegraph.co.uk/news/2016/10/03/philip-hammond- budget-surplus-

conservative-conference- live/

http://www.newstatesman.com/politics/2017/02/goodbye-liberal- era

https://www.theguardian.com/education/2009/may/19/philip-bobbitt- kissinger-cuba

https://www.theguardian.com/commentisfree/2010/jun/17/fiscal-deficit- threat

http://bilbo.economicoutlook.net/blog/?p=28597

https://alittleecon.wordpress.com/2014/08/06/government-debt- is-not- a-burden- on-

future-generations/

http://bilbo.economicoutlook.net/blog/?p=3891

http://bilbo.economicoutlook.net/blog/?p=23673

Reasons to support the teachers’ strike #teacherROAR

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Why should you support the teachers’ strike.

Please take your time to consider why teachers in England are taking industrial action on 1st October and again on 17th October.  Teachers have not taken this decision lightly – morale in the profession is at an all-time low. They have witnessed a destructive onslaught and systematic demolition of the education system, breaking up of local education authorities, forced academisation, attacks on pensions, removal of national pay-scales, increased workloads,  perpetual interference  of examination structures and the curriculum which are detrimental to education. Teachers are speaking out against the policies from the Coalition government which have damaged their livelihoods, and the lives of the children  they teach. This is a time for solidarity. Please support the strike. (Twitter hashtag is #teacherRoar)

The article reproduced below was published on “Teacher ROAR” blog, and comprehensively explains why the decision taken to strike is understandable, justifiable, and commendable) Now is not the time to attack those who are speaking out, but those in government who have caused such wilful destruction, for political and ideological purposes.

REASONS TO SUPPORT THE TEACHERS STRIKES, OCTOBER 2013

Tomorrow teachers in some regions of England will go on strike. This is the second in a series of proposed strikes by two teaching unions, the NUT and the NASUWT, who between them represent over 90% of serving teachers.

That they are striking together is significant. Historically the two unions have been rivals and relationships between them have often been fractious. What has caused them to put their decades of differences aside and work together? It can be summed up in one word:

 Gove.”

This can’t be said often enough. Striking is a last resort. No one wants to go on strike. Teachers lose a day’s pay, and know that they will be accused of wanting the day off, of being lazy, of not caring about kids, or deliberately inconveniencing parents. Striking is something you only do when you have explored all other avenues and found them blocked off.But Gove has united teachers in a feeling that a stand has to be made and, since he won’t sit down and negotiate with the unions, we are taking strike action.So what’s it all about? Well, where do we start? First of all Gove has announced that he wants teachers to work longer, pay more and get less for their pension than they agreed when they started the job.So what, I hear you say. People are living longer, it’s a time of austerity and the country can’t afford to pay out for your “gold-plated” pensions. Them’s the breaks, right?

No. For a start our pension scheme has had £43 billion more paid into it than has ever been taken out. Let me repeat that. FORTY. THREE. BILLION. POUNDS. more has gone into our pension pot, paid for by serving teachers, than has ever been taken out by retired teachers. Our pension doesn’t need any input from the taxpayer to make it affordable for years to come, it’s fine as it is.
The increased pension contributions that Gove has demanded we pay combined with the pay freeze over the past few years means that, by April next year teachers will have had a 15% pay cut in real terms since 2010. That’s a FIFTEEN PERCENT paycut. We simply can’t sustain such an attack on our wages.

And teaching is a physical job. Carrying heavy boxes of books around a school, standing all day, crouching down next to desks to offer help, standing on desks to pin up displays, intervening in physical altercations – these are all a daily part of teachers lives. Keeping 30 children focused and on task for the best part of six hours a day takes enthusiasm and energy. It’s mentally and physically demanding and while most teachers say they will struggle to make it to 65, Gove is now insisting they go on until 68.  The cynical might say that, of course, he knows that’s simply impossible and means that many teachers will be forced to take early retirement, thereby losing many thousands of pounds from a pension that they have worked hard for for years, often decades.

Workload is another issue.  While Gove would like to maintain that teachers waltz in at 9, leave at 3, and sun themselves on beaches for six weeks in the summer the reality is very different.Any teacher will tell you that a typical day starts nearer to seven, doesn’t finish until well after 6, that breaks during the day are non-existent and that weekends and holidays are taken up with marking and planning. And that’s for more experienced teachers. These days tales of newly qualified teachers being at school until nine or ten at night and then going in again on the weekend are not uncommon. Which is why there is such a high burnout rate in teaching. And Gove wants us to do more. While most teachers need the holidays to keep on top of their workload, remind their family and friends what they look like, and physically and mentally recuperate, Gove says we should have shorter holidays and stay in school for longer so that we can have additional meetings and supervise after-school sessions. But all of this, the pay cut, the stolen pension, the increased workload, he might have got away with all of this were it not for his devastating onslaught on education.

Amongst other things he’s
·         Removed the Educational Maintenance allowance that allowed poorer students to stay on into further education
·         Done nothing to reduce the trebling of tuition fees
·         Narrowed the curriculum into something one academic has called neo-Victorian
·         Removed the need for schools to employ qualified teachers
·         Stopped the schools modernisation programme and diverted the money into free schools often in places where there is no need
·         Destroyed university based initial teacher training so they we are now facing a significant shortage of teachers in key subjects
·         Created a schools places crisis
·         Refused to listen to the advice of the profession
·         Refused to implement policies based on evidence and research
·         Constantly denigrated teachers
Teachers have had enough. They’ve had enough of the attacks on their pay, on their pensions and their working conditions. But most of all they’ve had enough of the attacks on education.
gove2l

It’s time to stand up for education.

It’s time to stand up for teachers.

Please support the strikes. 

Support Petition for Fair Pensions – UK Neglect of the Elderly is a Disgrace

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UK Petition for Fair Pensions
– Neglect of the Elderly is a Disgrace

by Michael Thompson

Millions of elderly people in Britain today are having to choose between eating, and heating their homes because the State pension is so low. And what’s more the media are sweeping this issue under the carpet.

Cold kills 200 British pensioners a day during winter. Nine elderly people die from cold related illnesses, against a backdrop of soaring energy bills.

The Government’s future 2016 State pensions policy is inadequate and will be two tier. Today’s pensioners will continue to receive a meagre State pension and means tested handouts, only future pensioners will receive a £144 a week State pension based on contributions made, and means testing will be abolished.

So the UK’s existing 12 million pensioners will continue to be more worse off than their EU counterparts whose State pensions are much higher. I’m sure that a lot of elderly people believe they will be getting this full Universal State pension come April 2016. But they wont. This only applies to new pensioners from 2016.

When The Chancellor announced plans for the new state pension, he and all the media called it the Universal state pension. The rate would be £144 (at today’s rates), and it would be payable to all pensioners from April 2016. Now, that is what myself and others understood Universal to mean.

There was no announcement stating that this would only apply to new pensioners, and more importantly, that the amount payable would still be based on your national insurance contributions – needing 35 years contributions to get the full payment.

Britain is part of Europe at a cost of £60 million per day after net rebate, yet UK pensioners are not allowed to receive and enjoy Europe’s much higher State pensions. This is wrong!. As we are a part of Europe, Britain’s State pension should be upgraded accordingly. There is an EU ruling which says that all pensioners of the EU should be treated the same regardless of where they now live.

At the EU Laeken summit in Belgium in 2001, there was a ratified proposal that all EU member States, of which Britain is one, should endeavour to attain a State pension level of 40 per cent of their median wages as their basic State pension by 2007, and thereafter work toward 60 per cent.

This is how we did in 2007, compared to the rest of Europe.

STATE PENSION AS A PROPORTION OF AVERAGE WAGE 2007 COUNTRY % OF AV EARNINGS.
Greece 95.7 %
Luxemburg 88.3 %
Netherlands 81.9 %
Spain 81.2 %
Denmark 79.8 %
Italy 67.9 %
Sweden 62.1 %
EU AVERAGE 60% %
France 51.2 %
Germany 39.9 %
Estonia 32.9 %
Ireland 32.5 %
UK 30%

This is how we are doing this year, 2013, compared to the rest of Europe.

State pension comparison 2013

Max State Avg% of pension age

Country Pension Pay Avg Men & Woman.
Spain £26,630 £23,491 113% 65 65
Germany £26,366 £29,366 90% 65 65
France £15,811 £29,817 53% 60 60
N’lands £10,981 £35,627 31% 65 65
Denmark £11,381 £45,661 25% 65 65
Ireland £10,415 £41,803 25% 65 65
UK £7,488 £31,413 24% 65 62
Greece £3,756 £17,772 21% 65 65

Nothing has changed for Britain’s pensioners since this ratified proposal was made.

Millions of UK pensioners still live in poverty on a much lower State pension than European pensioners receive.

We in Link-Age UK wide are relative younger people taking this issue on, on behalf of our elderly people, wish to urge the Government to stick to the agreement made at the Laeken Summit in 2001, that due to the ratified proposal all member states should endeavour to attain a level of 40% of their median wages as their basic state pension by 2007 and thereafter work towards 60%. and to bring UK State pensions in line with Europe, this should be adhered to.

We in Link-Age UK wide are relative younger people taking this issue on, on behalf of our elderly people, wish to urge the Government to stick to the agreement made at the Laeken Summit in 2001, that due to the ratified proposal all member states should endeavour to attain a level of 40% of their median wages as their basic state pension by 2007 and thereafter work towards 60%. and to bring UK State pensions in line with Europe, this should be adhered to.

Please support this petition and send a message to the Government through your own constituent MP, or can contact Michael after 7pm any evening to receive a “free” copy of a letter to send directly to their MP at the House of Commons, and not their MP’s constituency address, because this is an issue of national importance, it is not a local matter.

People must have a pen and paper at hand when they ring.
The phone number to ring is 01803/ 857020. Also for those online, there is a petition, “Department for Works and Pensions:. We urge the UK Government to bring UK State pensions in line with Europe. Please take 30 seconds to sign it right now.
Here’s the link.

http://epetitions.direct.gov.uk/petitions/51449

Here’s why this is important.
Nothing has changed for Britain’s elderly people since the pensions and earnings link was cut in 1980, and this ratified proposal was made at the Laeken Summit in Belgium in 2001, and was agreed by “all” member States of which Britain is one.

I urge people to contract me at the above number after 7pm, and to sign our petition to show your disgust at this disgraceful situation for all UK pensioners, and force Parliament to discuss this issue which will bring Britain’s State pensions crisis to the media’s attention.

The Heartless Coalition has no Respect for the Elderly

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ACTIONS SPEAK LOUDER THAN WORDS

It is not difficult to see that David Cameron does not respect his elders, when we see how he treats experienced colleagues in the House of Commons (2) such as  Dennis Skinner.  He despises them, just as he does the young, the sick and the disabled. He has no respect for anyone it seems, valuing the financial sector for his own gain and those of his friends, – I think we can guess who.

David Cameron tried to shake off the Conservatives’ “Nasty Party” image, but  he forgot that actions speak louder than words. The ACTIONS of this Liberal-Democrat-supported-Conservative-Government speak very LOUDLY indeed.

  • State Pension Age extended – women not forewarned.
  • Attacks on Public Sector Pensions
  • Private Pension Schemes failed ( as speculators move elsewhere)
  • Cuts to Elderly Care in the Community
  • Privatisation of Care Homes, despite evidence of failure
  • Imposition of a ‘Granny Tax’

STATE PENSION AGE

In November  2011 the Coalition government announced the intention to further increase the state pension age. (13) State Pension age will now increase to 67 between 2026 and 2028. Meanwhile changes have been made to others nearer to retirement age, and these changes have been made at short notice. The government said it took this decision because of increasing life expectancy, to help manage the cost of State Pensions. There is no consideration as to the nature of the employment or as to whether jobs would be  available with rising unemployment or suitable as people become less physically able, and perhaps slower mentally due to ageing.

Furthermore changes  made over recent years come as a shock to people who have budgeted through their lives, expecting to receive pensions at 60 or 65. Many women, who had been led to believe that they could  retire at 60, and who had planned accordingly., now find that they cannot receive their state pension until at 65 will find themselves with inadequate savings,

Working later is absolutely fine, and in fact desirable for many people are who are fit, and wish to continue work, but these policies are ill-thought out.

ATTACKS ON PUBLIC SECTOR PENSIONS

Recent attacks on public sector pensions show no understanding of the consequences. Public sector workers, often on lower pay than some in the private sector after years of study are expected to pay greater contributions to their pensions and to retire later.

Many workers face  an impossible task, to continue working in physically and mentally demanding jobs. If people wish to retire at 55, and young people are fit and  qualified to take over, then it is reasonable that they should have that option. Why is working longer  being inflicted on our caring, hard-working public sector?

 Work Until we Drop? (6) From the BBC News

..Martin Powell-Davis  “public sector workers – whether

they are in hospitals or schools or anywhere else – cannot work at the kind of pace we are asked to work at until the age of 68”.

“People know that we will be asked to work until we drop – and we won’t get a pension because we won’t live that long.”

..Kate Paton  “No-one wants to see teachers and health workers doing the job at 68 when we need to make way for younger people.”

The government hopes that the unpopularity of public sector strikes will be divisive. In fact there has been wide scale support for public workers. Now, the government is pursuing whole-scale privatisation seeking to silence people through fear.

PRIVATE PENSIONS FAILURE

The government seeks strengthen its case, by weakening the opposition by dividing public from private. ( See Think Left’s “Public and Private Workers, Unite “) (7)  Working for very low pay is the plight for many in the private sector. Often these workers have no effective trade unions to state their case, due to the attacks of the trade unionism by Margaret Thatcher.

Neoliberalism has meant that speculators have been predatory without any conscience. They seek to profit at others expense and there are many people who sensibly invested in private pensions only to have found on retirement that their pensions are half what they expected. Gambling with the income and welfare of our elderly population is callous. All workers are entitled to and deserve a decent pension, and  workers need to fight this together, and not allow this government to divide and rule.

Whether public or private, working people pay for their pensions while working, and there is an expectation, a contract that this is investment for the future. This is a contract which they have honoured and paid for. The financial sector must honour the contract too.

 As Richard Murphy 1) writes:

A fundamental pension contract  should exist within any society. This is that one generation, the older one, will through its own efforts create capital assets and infrastructure in both the state and private sectors which the following younger generation can use in the course of their work. In exchange for their subsequent use of these assets for their own benefit that succeeding younger generation will, in effect, meet the income needs of the older generation when they are in retirement. Unless this fundamental compact that underpins all pensions is honoured any pension system will fail.

Download Richard Murphy’s Making Pensions Work here (5)

CUTS TO COMMUNITY CARE

Community Services for the elderly have been cut by over  a billion pounds since the Coaltion government came to power.. These cuts are not only heartless, but a false economy. These are crucial  services which have allowed many people to continue to live independently, and loss of this independence will come at a cost to us all. Caring, admirable people who are working in the care sector for low wages face further cuts.

8)

PRIVATISATION OF CARE HOMES

It is only about a year ago that there was an uproar about a private company called Southern Cross which, having privatised a chain of Care homes for the elderly, went into receivership and a host of Care Homes had to close. 10)  But regardless, the government relentlessly pursues its programme of privatisation of public services, and elderly care is targeted, along with everything else we value, including state education and health. Across the country, care homes are privatised, despite the inevitability of a decline in standards.

The Guardian  3) reports: The Equality and Human Rights Commission’s report last month found that council-funded home care provided to elderly people was, in some cases, in breach of the European Convention on Human Rights. Many people were surprised at the report’s findings. But not me. It was the wholly unsurprising outcome of the wholesale transfer of care homes out of local authority care and into the private sector. The council may have funded the care, but they were not responsible for actually providing it. It was consumerism meets care head on and no one could be in any doubt as to who the victor would be.

It is totally immoral that caring for people should be a source of profit. It’s just plain wrong. When we are young we pay taxes to care for our futures. Today’s elderly people did so  during their working lives – they did not make those contributions so the  financial sector can make profits to line the coffers and top up hedge funds. This is theft.

IMPOSITION OF A GRANNY TAX

The “granny tax” (4) was the biggest revenue-raising measure in the budget. Some four million pensioners over 65 will have their personal tax allowances frozen. This is another cynical attempt to make cuts at the expense of ordinary people, in a budget which saw the cuts in corporation tax – a budget for the wealthy. The chancellor’s austerity policy is not working, We continually people suffer cuts to their living standards and all because of Osborne’s  obsession with a deficit caused by bankers –  not ordinary people who have already paid taxes all their working lives and now hope for a comfortable retirement. It is most unfair!

The NPC says it has been inundated by complaints from pensioners that those on modest incomes will have to contribute more, while people earning more than £150,000 a year will see their top rate of tax cut from 50p to 45p. It says there is a perception that pensioners are being asked to bail out the super rich, which is unfair.

Labour has released figures suggesting that “well over half” of the pensioners affected by the tax have incomes far below the average taxpayer, in spite of the government’s claim that the better-off will shoulder the burden.

Labour MP Katy Clark called for households to be given sufficient time to cope with the planned changes: “This is quite a substantial drop in income for people on modest and medium incomes at short notice. Channel 4 News (4)

WHY TARGET THE ELDERLY?

The arguments are shallow, contradictory and transparent. The state pension age has been raised with the expectations that everyone is now expected to work longer. There are many, many people who love to work, are fit and want to continue, and that is wonderful. Others feel they are ready to enjoy the later years in life, which is why they paid  for pensions, only to find someone changed the rules, and the pensions have been hijacked.

We have heard all their excuses  that “we are living longer”, so “we can’t afford to give you the pensions you paid for,  or the health service you paid for and the elderly care,  which you paid for. It’s no joke to have struggled all your life and then see your assets stolen for private profit. It might be a joke to some, a comedy show as they cry, “Carry on Working” , despite a million young people looking for work, and  being forced onto dole queues. All of this demonstrates how the Coalition abuses its power. The electorate remember Thatcher and the nasty party.

Labour must show that there is an alternative. The electorate may forgive New Labour’s courtship with neoliberalism which opened the way for the Coalition to privatise our services.  The electorate needs to see Labour showing it is the caring party it was set up to be,  developing policies for recovery which will invest in all of our people provide fair pensions for all, and develop a National Care Service.

Labour must demonstrate its priorities are for people and not for profit. Actions speak louder than words.

1,Richard Murphy – Why our Pension schemes and Arrangements do not work

2. Metro: Cameron accuse of ageism in Commons  against Dennis Skinner

3. The Guardian: Privatising care will inevitably lead to lower standards

4. Channel 4 News : Pensions confront MPs over Granny Tax

5. Document: Making Pensions work by Richard Murphy

6. BBC Public Sector Strikes – Work until we drop

7. Think Left -Pensions – Public and Private Sectors – Unite!

8. The Daily Mail – Elderly Care Crisis

9. Think Left’s More Care Homes to Close

10. Guardian Datablog: Southern Cross Care Homes

11. Think Left -Public Service or Private Profit 

12. Think Left – A National Caring Service

13. Direct Gov Changes to State Pension Age