When you realise that this article is about pensions you may be tempted to
stop reading. Please, please don’t. Gordon Brown is counting on you looking
away.
For a decade the chancellor has relied on our instinctive revulsion for the
topic. Pensions are complicated. They force us to think about ageing.
Raising the subject naggingly reminds us that we are saving too little. We
would rather turn the page; and that is why Brown has escaped unhurt while
our pensions system has collapsed.
At last he is taking some blame for it. Having decided 10 years ago to
increase by £5 billion a year his tax take from pension funds, he is being
attacked because warnings given to him at the time by cautious civil
servants have been published. It is amusing that Labour ministers are hoist
by the freedom of information legislation that they once drafted
enthusiastically.
However, economists have popped up in the press denying that Brown’s tax grab
is the principal reason why final salary pension schemes have withered.
Changes made by the Tories before him, for example in response to the Robert
Maxwell scandal, are argued to be at least as significant.
Well, if it is true that decisions taken by Brown’s predecessors had weakened
the pensions system, then his misjudgment in sucking money from it appears
worse, not better. He should have considered what additional burden our
enfeebled funds could bear. Also, while it is seductive to argue that
pension funds worth £1,000 billion could hardly have been laid low by an
impost as tiny as £5 billion a year, if you take £5 billion every year for
10 years, after a while, as they say, you are talking serious money.
The bigger question is why, once the pensions disaster had become apparent,
Brown took no corrective action. Let us grant that in his first years the
chancellor controlled public spending tightly, the stock market was healthy
and pensions showed few signs of strain. But from about 2000 public spending
was growing massively, the value of British shares plummeted and final
salary pension schemes began to slam their doors to new entrants. Since 2000
the catastrophe has rolled out inexorably while Brown has sat on his hands.
One reason is that thanks to the lack of interest in pensions among the media
and public he felt little political pressure to act. Second, he was by then
hooked on the money. The annual £5 billion was essential fuel to keep public
spending roaring forward. Third, even to mitigate the effect of his tax raid
would be to own up to error. The impoverishment of millions of pensioners
was a price worth paying to avoid any such admission.
Tony Blair argued last week that Brown’s original decision had been good for
pensioners and for the economy. On the contrary, it was clearly bad for
pensioners, the only dispute being how significant it has been in the
overall debacle. To contend that it was good for the economy you would have
to believe that the money was better spent by the government than it would
have been by the pensioners from whom it was taken. That sounds very old
Labour and since the government has flooded the public services with cash so
unproductively, Blair’s point is unsustainable.
Harking back a decade may be worthwhile if it finally establishes Brown’s
guilt, but it risks distracting us from the bigger calamity to come. On
Brown’s own figures three-quarters of pensioners will be dependent on
means-tested benefits by 2050. That is partly due to the shrinking private
pensions system, but also because the basic state pension is so low. The
latter has large implications for what will happen next.
The government is wrestling with what to do about millions who have no pension
or who save little. It favours auto-enrolment, a system that will require
employees to be in a pension scheme and benefit from employer contributions,
unless they opt out.
Unfortunately, if workers have low earnings or long periods without a job,
what they pay into the scheme over the years may be too little to raise them
above dependence on means-tested benefits when they retire. In that case
they will be worse off for having saved (because they did not buy things
with the money while they had it). Only the government will have benefited,
by pocketing their contributions.
If people get wise to that, there will be a mass opt-out. If they do not spot
the trap, they will then have a grudge (and maybe a legal case) against the
government for luring them into pointless saving that made them poorer.
The problem gets worse. The government would like people to invest largely in
shares since normally equities give the best return over a long period. But
stock markets are risky up to a point.
So ministers might need to offer an entirely risk-free alternative from which,
sadly, the returns would necessarily be low. Research shows that uneducated
investors usually opt for the lowest risk. If they do that, then the chances
of their savings being wasted will grow.
Were the basic state pension much higher than it is, most pensioners could be
floated above the threshold for means-testing. Then any income from their
contributory pension, however meagre, would be theirs to enjoy, not to be
clawed back by means-testing.
Inequality on a scale unknown for decades now looms for Britain. If the basic
state pension continues to be linked to prices, it will be worth about a
10th of average earnings in 30 years’ time, so those in work will be
markedly better off than those who have retired and many will suffer a huge
fall in living standards when they do retire. Even among the low savers,
those who are lucky, perhaps because they inherit a house from their
parents, will be lifted far above their peer group.
It is hard to see how such inequality will be socially or politically
acceptable. Yet because pensions are an arcane subject, and because the
worst effects lie some years ahead, Brown is content not to act.
The British scene is in marked contrast to the rest of Europe. By the middle
of this century pensions will be costing the British state a bit more than
4% of GDP, which will be a quarter of the figure for Germany or Spain.
You might think that would make any Thatcherite beam with satisfaction. While
our continental competitors sweat under an enormous public sector pensions
burden, British companies can be lightly taxed.
On the other hand, even in the mid-century German or French workers may be
retiring on pensions worth fully half of what they earned in employment. The
poverty experienced by most British pensioners will be matched only in poor
countries, if at all. Again, it is doubtful whether the British politicians
of the day will be able to endure the sense of shame.
The British system might still be all right if final salary schemes had
survived or if we were a nation of big savers. In fact we are the least
prone to put money aside and since the chancellor taxes interest on anything
that we do save, profligacy seems economically rational.
That contrast between continental Europe and Britain poses the issue of what
sort of country we want to be. To an extent that he would not wish to admit,
Brown has accepted the Thatcherite model, even though the assumption (a
buoyant private pensions sector) on which Margaret Thatcher based her
policies has changed.
Given Brown’s unwillingness to admit errors, perhaps the new Tories are in a
better position to consider the following questions objectively. Should we
continue to hold down public spending on pensions, even at the risk of
greatly increased social inequality? Or should we bolster the living
standards of the old at the cost of expanding the state?
After all these years we need to ask: which produces greater happiness and
social cohesion — the Thatcherite model or continental European social
democracy? Brown’s answer we already know. But David Cameron’s answer we
await with interest.
michael.portillo@sunday-times.co.uk
I once was proud to be British but as I reached retirement I realised that being loyal to your country did not pay off I have worked since before I was 15 hardly ever having time off and sadly had to take early retirement through an accident I dont understand that nearly every week money is being put into either education pregnant women or unmarried mothers even at the Bournmouth conference no mention was made as to the plight of pensioners we know that we dont put anything into the country but have served it well in earlier years but do the government rush to our aid when the cost of living rises no they wait a year or so then give us a small increase witch has no resemblense to the cost of living rise we want a descent pension so we can hold our heads up I guess it will be the same story from Blackpool everything but OAP's why cant we get just one mp to fight our corner properly and not spout a lot of hot air is this to much to ask I like many pensioners served in the forces
e marshall, birchington, kent
Why does an intelligent man like Michael Portillo not point out that the taxation environment in which pension funds exist, both before and after Mr Brown's "raid", is vastly more favourable than it is for any other form of saving? Why does he not explain that an effect of these arrangements has been to create an enormous capital fund that is driven by the requirements of the pension funds; and that is highly questionable that this leads to the investment decisions taken ALSO being in the best interests of industry and the people generally? Where does he discuss the ethical rights and wrongs of maintaining an investment vehicle in which the well-off are given a tax-free opportunity for paper wealth creation that is not available to those on lower incomes?
Perhaps Mr Portillo considers it his responsibility to write from a point of advocacy, not balance. If so, I think it would be better for him to admit it, so that his articles may more easily be read in an appropriate light.
Simon Stephenson, Windermere, UK
Michael Portillo is correct that no-one has made much noise about this issue even though everyone has known about it for the last 10 years. While I'm sure it's true that Gordon Frown has helped to desimate the pension system, I still think the current hoo hah is more to do with the anyone-but-Gordon-for-PM bandwagon than about what people are going to live on after they're 65. With untrustworthy private pension schemes, ditto company schemes, ditto public sector schemes (the Govn' are quite good at changing the rules), everyone will just have to work on after 65. Lets just hope we will have the opportunity.
Cirep G Nol, London,
It's no different in the US, short-sighted politicians using short-term solutions for long-term problems--and the only people who suffer, are those who can least afford to suffer.
The only difference, I can see, between our two great nations, is that you have a slightly better social support system and much more affordable health care.
Nancy, Glens Falls, USA NY
With this government taxing our earnings and also with the many stealth taxes which effects those employed, is it little wonder we have any money left to invest in a pension? I have had a private pension for many years, but have been unable to pay into it for the past 7 years as I have not earned enough to do so. Also, when can we see public sector workers paying into their own pensions via money purchase schemes, rather than at the expense of us as tax payers?????
K Law, Leicester, UK
I am amused to see Mr Portillo come full circle, in the 1990's he was the voice of capitalist venture (as a good Thatcherite) and he never claimed to be anything else. now he champions the cause of the poor and low paid in this country while the "labour" party Tax the lowest earners more and more, are discovered to have raided pensions from the time they entered office. In response to those pointing out Mr Portillo's desicions in the 90's , he is entitled to change his opinion in light of expierience. however i would like to see a polictical party who overturn the discisions of the last 20 years that have proven in error, alas i fear that all the politicians standing are now chameleons who change alegience to best get into government. ( see the many ex Tories who jumped to Labour in 1997). as for answers I agree that the European model may well be a better option, all it needs is a chancellor brave enough to change these things.
Ben , Folkestone, Kent
Good piece, Michael.
Nevertheless, should you not foot some of the responsibility for our use of the Thatcherite model, particularly seen as you "served as Treasury Secretary" for the Tories in that era? What on earth were you thinking when you helped devise the downfall of our pensions system??
Rapr, Exeter,
The answer may be to increase the state pension, but pay it only to those people who have actually earned it i.e. workers. It is galling to see my mother struggle on the current pension, having worked hard all her life, while my neighbour receives the same pension having never worked at all.
There's no point saving for a private pension either. You'd be far better off enjoying your money while you're young, because the government will just take it off you when you retire and give it to freeloaders.
Carol, Nottingham,
Everything Mr Portillo says here is true, but let's not forget who did away with the culture that regarded pensions as something sacred - Margaret Thatcher. Didn't pensions misselling start under her regime? Wasn't it she who did away with state pensions being index linked? Wasn't it under the Tories that Maxwell was able to steal the Mirror Group pensions? How many other so called entrepreneurs able to do pretty much the same under her regime? She also brought us to the sorry position we are in now, where many ordinary people have had their salaries forced down to a level where they live in controlled debt even when they are in full time work. How many ordinary people have any disposable income to be ABLE to make pension provision or take any prudent decisions about their financial futures even if they wanted to? Gordon Brown's jiggery pokery with pensions is just one part of a huge problem ordinary people face as part of the Thatcher legacy.
O'Drisc, London, England
I think the most cost-effective thing to do would be to pay everyone enough to live decently and then tax them on whatever they earn above that amount. Then you'd need to means testing, no grants, no allowances, many less civil servants. I'd think the savings in overheads would be enough to pay for it - and after all that's what every government says they are determined to achieve so why not just sort it. There would be a big incentive then for people to earn more for the nice things in life.
pam myles, Isle of Wight, UK
"Useless loafers" in the public sector such as doctors, nurses, ambulance drivers, firemen and the armed forces.
But let that pass. This piece is an excellent, well thought out and argued refutation of the ludicrous Kaletsky article of the other week.
Mark Lyndon, London, UK
Michael Portillo is absolutely right , inequality does now reign supreme after 10 years of Labour government. And this is surely a damning indictment on the Labour Party, a body that we should remember was set up to redress social injustice. Michael of course should remember that the eradication of social injustice was never a motivation for the Conservative Party. And the reason that the poor are now in the plight they are in is because the Labour government is following traditional Tory policies. Blair is a child of Thatcher every bit as much as is Cameron
A B Robertson, Dunoon, Scotland
its a bear market
stocks and property look 2 move into the deep south in the big pic
duncan Robertson, isle of skye, uk
The UK is an economic disaster waiting to happen. I left 4 years ago and look back with increasing horror at what is happening over here. Gordon Brown has robbed the most productive segment of the population of their retirement funds and given it to the useless loafers in the public sector. Hard work does not pay in the UK. If you are young and ambitious leave before you get tied into a life of state slavery!! It was only when I'd left that I realised how poor the standard of living is in the UK.
John Cran, Tallahassee, FL
We must be realistic that the Uk has been a spent force for sometime now. I understand why many have emmigrated from the UK since New Labour but lets face it more brits have abandoned their country than any other comparible western nation since WW2.
Those that now reside smugly in the USA should remember that America charged the UK alone for war debt and supported IRA terrorists before it became unfashionable to aid bombers.
John, GLasgow, UK
I have listened to Ball's and Brown's explanation that the 5bn a year tax raid was not the straw that broke the camels back but that over the medium term final salary schemes would recover. In light of the fact that 10years on the final salary scheme is in its death throes apart from the public sector, which incidentally had to be bailed out by the taxpayer in the form of Council tax rises,Why has nobody said to Brown you have repeatedly lied and ruined our pension schemes.Using an historical comparison the only thing that springs to mind is the rape of the sabine women -in brownspeak it would translate as gentle foreplay, no long term probs.
Philip, Ipswich,
I encourage anyone that can leave the UK to do so, almost any other country will do.
I left 3 years ago, never looked back, I am not even sure why I read the UK newspapers websute. I think maybe it is a morbid curiosity like watching a car accident on the opposite carriageway on the highway. Certainly the UK as I knew it is changing and I see nothing that makes me think it is for the best. I am afraid the UK will go the way of its sports teams. Under perform, disappoint and get beaten by third world opposition.
I have UK pensions I shall take the cash (whatever is left after the daft Scotsman has plundered them) and get out of Dodge!
Paul Barrett, Hinsdale, IL
The Great Empire no more.
The EU certainly did you a lot of good when you blinked, and of course that great socialist institution called the UN, the leaders in keeping us all save did nothing as usual.. It had to be the US that everyone so hates, to save your bacon.
Does anybody in the free world have any balls to stand up against terrorists besides President Bush? It certainly is not the Royal Navy.
Kurt Gerlach, Fountain Hills, The good old USA,Arizona
I'm sorry Michael but people have got wise to the pointlessness of saving for old age.
My sister,who has never done a days work in her life has retired with rent,council tax ,dental treatment and spectacles,all free of charge,she is rewarded for being feckless.
I,on other hand have always worked,I have to pay for all the above,so am being penalised for my effort.
I have told my grandchildren not to bother to work and definitely not to save,why should they and be kicked in the teeth for their trouble,like me.
Rosina, birmingham, England
Part of the problem is an institutional blindness to what has happened.
Bruce T Brown, Sutton Coldfield, West Midlands
A good article, Michael. Have you ever thought of standing as a Conservative MP? I think you could have risen as high as Chancellor, and become rather a good one. We need people of quality to form the next government -- after all journalists are two a penny.
Herbert G., Leeds,
This pensions debacle is further solid evidence that this country is governed in the interests of the governors and not the governed. Europe provides the contrast, as you have observed.
Henry Percy, London, UK
Well, well, Mr Portfillo. I think you are relying rather too much on people forgetting that in your Thatcherite pomp (pre-floppy hair) you boasted that because of the Tories delinked state pensions from wage increases and linked them instead with RPI, the average state pension would only be about 7% of the average wage and - therefore not a burden on the taxpayer. I do not remember the implications for old age poverty troubling you.
But, then I remember you saying that the poll tax would be an "election winner". Not a quote, that you make in your cosy - and well paid - sofa chats nowadays.
Yes, there have certainly been errors made by the government in recent years on pensions.
But, it is a bit rich coming from you to go on about other not admitting errors.
What about you?
Brian Longden, Islington, UK
Peter Manolescue, Oxford, UK, i had no intention of posting untill I read what you had to say. If there is in deed more to come and we are only at the beginning and you seriously think that a good thing, then I would suggest that you are completly off you head and havent a clue of the damage this labour government has inflected on on our dear country.
I suggest you stop reading comics and buy a News Paper.
D Case, Newquay, UK
Dave will need a bit of guidance on this one. A slick, LibDem-friendly answer might backfire unless it si very thought out.
Gervas Douglas, Andorra la Vella, Andorra
Michael Portillo asks whether the Thatcherite economic model or the Continental one is better. Well, I know Germany, having lived and worked there for twelve years and I know that the quality of life there is better in all respects than in Britain, whether one is employed, unemployed, or a pensioner. I think the German social market model is a far better system than anything Britain has had since 1945, even when we were never having it so good, allegedly.
Mike Mitchell, Spalding, England
During the Thatcher years I thanked god that I had a good pension fund built up over 20 years and in a country that lead Europe for pensions provisioning. All that changed at a stroke when Brown took over as chancellor and now my fund is a fraction of what it was and the state pension is a complete joke. I'm not saying Brown was completely to blame but as far as culpability goes, he is 100% at fault when he callously raided the funds in spite of warnings. To add insult to injury, we were the prudent ones in the 70's & 80's whilst Labour screwed around in a mess, but in an act of spitefulness he's stolen a big chunk of our future just to fund his Stalinist social engineering programs. Of course he's sitting there with a gold plated state funded pension whilst the rest of us can go whistle or beg for pension credits if we're lucky. I hope no one's stupid enough to make him PM and as far as I'm concerned, he can rot in hell for all the damage he's done to peoples retirement plans.
Mike, Denia, Spain
Mr. Portillo is long on blame but short on practical solutons. In the last twenty five years the media and the politicians have been involved in a blame game which seems to forget the long term intrest of the population as a whole. I am a senior citizen, during my working life of 40 years in this country I did not have a company pensioable job till I was 35 years old. Initially the contributions to company pension scheme were 5% of pensionable salary. At the age of 50 years I realised that if I continued with these contributions I would not acrue enough retirement pension, therefore I increased my contribution by further 10% as avcs. After 27 years with the same company working 10 to 14 hours during the last 10 years with the employer I was Made redundant.With all the voluntary contributions the pension accrued was only 45% of the basic salary.Now no body is going to be with a same employer for 27 years. I sugest you read my comment on Anatole Kelesky's article in the TIMES ON LINE.
Nandkumar, Maidenhead, Berks
Today's Pensioners deserve a better deal and pension payments should be calculated according to average wages. After all Pensioners are people too and are entitled to a life.
Today's Pensioners suffered rationing. I remember sharing an egg, yes a single egg with my mother for lunch when I was about 5 years old.
Today's Pensioners dealt with decimalisation. After decimalisation the price of items double or even trebled.
Graduated pensions are now reduced to a laughable return and even SERPS are now calculated on one's full working life instead of the last 20 yrs, thereby rendering them to half the originally promised amount.
Now in my early 60's I still having to work to supplement my manky pension allowance.
Ms M Dacre, Leeds, England
Michael Portillo's article is gloomily accurate. Yes, New Labour is Thatcherism without any of the private sector or tax benefits. Brown's loyal constituents in Cowdenbeath haven't figured out that before 1997 he only SAID he was a socialist but since 1997, his ACTIONS have been further to the right than his Tory opponent. When I was in Germany two weeks ago, people were shocked when I told them the outlook for the UK elderly They asked how the world's fourth biggest economy can't provide for its old. I said that much of the UK's money goes in and out untaxed and that which stays is wasted by an inept and cynical government. In 10 years of Brown, our endowment policy dive bombed in value and our private pension fund failed. The silence of MPs in the same scheme was secured by early warning and the option to get out without penalty before a 20% exit fee was imposed on the rest of us. We will now have to sell our house to provide a subsistence pension before Brown taxes that too.
ian, bath,
New Labour set out to change Britain. We have seen the results of this transformation - from Jeckyl to Hyde. 18 years of opposition have made Labour bitter and it appears to be taking its revenge on pensioners,families, employees, middle class, the low paid and anyone else who is vulnerable. Our elderly have suffered from neglect. Our sick from poorly run and expensive health care. Our children from failing schools.
Jeckyl Blair to Hyde Brown - concocting a Frankenstein State. I wonder how many of the current cabinet don't like walking out at night during a full moon...... ??
dave , Swindon, Wilts
As a worker, I find it astonishing that I have to hand over 11% of my gross pay by way of NICs, yet won't be able to retire until I'm at least 67 (probably older than that). I also put money into a private pension, although that is a real struggle because even working 70 hours a week doesn't earn me a fortune on minimum wage. When I do retire, I doubt very much if there'll be anything in the way of a state pension for people like me. I suspect that most of the money will be spent supporting people who never bothered to work at all. I will never own a house, have never been on holiday (not even in the UK, never mind abroad), don't have any luxuries. Every day of my life, I feel like I am being penalised for working hard and trying to save for my retirement. I had hoped that, one day, I would at least have a little peace & quiet, even if I could never afford luxuries such as a car. Now that Gordon Brown has decimated private pensions, I think I'm going to work til the day I die.
Kerry , Derby,
It is a moral disgrace that inequalities have widened and will continue to do so. Consider someone on a low income working flexibly, part-time with an income a little above the earnings limit, £82 /wk, for claiming carer's allowance. This person is caring for elderly parents (in their 80's) who do not own their own house. The parents have been allowed to accumulate their very meagre pensions/ allowances, whilst cared for in house owned by working carer who has largely paid for all their needs for 20 years. These meagre income pensioners have as a result built up some reasonable savings. Not only is carer penalised and left on a current low income and faces a low pension future, but the carer's parents are unable to claim pension credit on their meagre income because of savings which in reality belong to the austere carer, who has allowed them to save it to give them a feeling of security. If the parent's owned a home the carer could inherit it. Equality for whom? Shame on Gordon Brown
SD, London,
There is absolutely no question about it - Brown is the worst ever Chancellor. Apart from completely wrecking pensions, he sold off our gold reserves at low prices. He has also accumulated so much debt that our children and grandchildren will be paying for this man's profligacy for many years to come. His failure to control the ballooning costs of public sector pensions is very likely to wreck the economy. How did anyone ever think this man was prudent?
Derek Green, Shipley, Bradford, England
I am an OAP. The plain truth is,Retirement pensions are just the same as any other Benefit payment. They encourage the irresponsible,the work shy and the unreliable. To be profligate is to be "shrewd". I save it- you receive it.
It can hardly be said that old age arrives unexpectedly.
My living standard after 50 years of work is marginally better than someone who would have spent that time in HM Prison.
Peter Bolt, Redditch, UK
Given that successive governments have deliberately raided peoples' pensions for their own short term expendiutre whilst ensuring that their own retirement is ring-fenced and feathere bedded, we should all demand that politicians stop their interference.
There must be some way to make pensions independent from political interference in much the same way as Brown made the BoE independent. Any suggestions anyone?
Edwin Thornber, Bucharest, Romania
A very important article. The view that this problem can be solved by abolishing the retirement age and getting pensioners to work longer ignores the question of jobs availability.
In fact pensioners tend to suffer a 'double whammy' - if they don't work they are accused of being 'idle' and dependent on the state, while if they do work they are supposed to be 'taking jobs from the young' and keeping 'new blood' at bay.
It is all very well for people to talk of a higher maximum working age and an end to 'ageist' deiscrimination in the workplace, but the trend of the last fifty years has been for fewer jobs to be available and for people to work less - longer holidays, shorter working week, more time in education before work at the 'other end' of life. This trend is unlikely to be reversed through special job creation schemes for enthusiastic 60-somethings. Most pensioners will simply not be able to work themselves out of trouble. Portillo's analysis is spot on.
Dr. Mark Corner, Brussels, Belgium
Could Richard Ramsey please explain himself from the comfort of his home in Canada. What has 'pensions' to do with 'retaining' sterling?
Mr Portillo again writes a superb column. At the next election I shall express my opinion by not voting, unless the unimaginable occures.
Robert, London,
Not only has Gordon Brown mugged the occupational pensions of those working in the private sector, but he has created colossal liabilities on the guaranteed pensions of the burgeoning public sector. In 25 years, Blair's biggest mistake will be seen as indulging this man and his reckless expenditure.
David Stuart, Aldershot,
People are missing the point when they say that Brown only took £5 billion from funds worth £1,000 billion.
He took £5 billion annualy from the income on £1,000 Billion. If prudent investment returned 5% a year then Brown took 10% of the annual income, which is significant.
Tom Sykes, Holmfirth, Yorkshire
thatcher gov messed up our old age pension,so m portello can not pass any comment.
david ware, barnet, london
Increasing the retirement age is not really an option. Ask anyone over the age of 50 who is job hunting how easy it is to find employment. What is needed is a basic pension on which someone could live, abeit frugally. This could be paid for by dismantling the fiendishly complicated system of means tetsed benefits which many pensioners find demeaning and/or incomprehensible. The money spent on administration together with the benefits would pay for all to have better pension. In passing, I fail to understand why it is still acceptable for a married woman paying a married woman's stamp to have a lower pension than a single woman who has been unemployed for most of her life.
carole chapman, corridonia, italy
Are readers aware of the generosity of MP's pension scheme-paid for by us? Not long after coming to office Mr Blair and Mr Brown 'accelerated' the accrual rate on the MP's scheme to only 30 years -making it even more generous than the Civil Service scheme. Are you bored already? Don't be. An MP now needs to serve on 10 years to gain guaranteed pension rights equal to 20% of their salary or over £12,000 at todays pay level.
iain morse, edinburgh.,
The money has been spent on the NHS. So richer pensioners with occupational pensions are subsidising the poorer ones. Whilst you can disagree with this, young people are struggling under an unsustatainable burden of university, mortgage and car debt, and cannot even afford to house and bring up their children.
Malcolm McLean, Bradford, UK
If you listen to the tripe that is spouted by politicians of all persuasions you would be forgiven for thinking that pensioners are not wanted in a ‘young Britain’ and that anyone over the age of 55 is a drain on society. The views and actions of many people, who allegedly represent us in national and local government, whilst ensuring that their pension pots are full, appear to subscribe to the notion that pensioners are expendable and a drain on society. Present day credo subscribes to the following commandments: a. On reaching retirement age we live in poverty because anything we have put into national insurance contributions will not provide a decent state pension. b. We are hammered by increasing stealth taxation especially the iniquitous council tax. c. To live in fear of crime because we appear to have imported criminal elements from around the world. d. To struggle for medical and dental treatment on the NHS. e. Means-tested benefits to exist. Pathetic!
Kenneth Armitage, Suffolk, England
I think Michael has missed the point. Gordon's role is that of John the Baptist: he works not for himself but the one who comes after him. Which of the host of means-tested, supplicant pensioners of the future would dare not to vote Labour and risk turning off the meagre largesse of the state? New Labour's scheme of creating a passive, supine 'client state' is a long-term project. We are only at the beginning: there is much more to come.
Peter Manolescue, Oxford, UK
We have a political system where the Government was elected by 22% of the Electorate. They include the word 'Labour' in the title they use, so naturally we tend to assume they have some connection with the Labour Party of the past. New Labour is not old Labour and I do not believe we have yet begun to understand what has happened here. We have a middle class elite running the country with no real association or empathy with the rest. They quite obviously do not equate poverty with their grand endeavour and the sooner we all understand that and call it like it is, the better. What is so dismal about Westminster is that the Conservatives broke the link with Pensions in the first place and the Liberal Democrats make up a large part of that middle class minority. Where we go from here is anyone's guess but I do not believe we can look in the direction of London for any change in the situation. It will probably come from elsewhere.
John , St Ives, Cornwall
Misses the point. The fundamental problem is that Brits are still forced to retire at ridiculously low ages. It's a scandal (from an American pt of view) that such age discrimination is still legal in a quasi-civilized country. But it also has the side-effects Portillo points out. Abolish compulsory retirement!
A.W. Carus, Pasadena, CA
Labour is for the working people, yeah right.
"Four legs good, two legs better".
From Animal Farm when the pigs started walking.
Stan(expat), USA, USA
Since workers pay taxes all their lives, they are entitled to a little bit of respect.
Pensioners should be protected by society. And England should avoid the temptation to give up the British Pound Sterling - that would be the height of foolishness.
Richard Ramsey, Salt Spring Island, CANADA
An excellent article:the ball is now in the Conservatives' court!
COLIN , Hong Kong,
Socialists wish to destroy the Capitalistic system. What better way to do this than destroy the savings of everyone. Thereby " needing" the State to come to their rescue.. Where the State gets it's money from is a bit foggy.
Desmond Taylor, Houston, TX
How right Michael Portillo is. Gordon Brown's means tested benefits have resulted in more than 2 million standard rate taxpayers in the private sector to stop saving for their pension. So instead of being independent they will live on benefits paid for by taxpayers. Pension Credits, no council tax and many other great means tested benefits. Gordon Brown has made fools out of those who really struggled to save for a modest pension. Spend now and live off those nice taxpayers who will be pleased to thank the Chancellor.
Finlay McNaughtan, Glasgow,