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Raising the retirement age

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Stephanie Flanders | 17:38 UK time, Wednesday, 6 May 2009

There are no good options for cutting government debt, but extending all of our working lives could be the best of a bad lot.

That's the basic argument in a paper released [pdf link] on the back of today's NIESR report.

To recap, the institute's economists think that debt will rise to nearly 100% of GDP by 2015, not 78% as the Treasury forecast in the budget. It will start to fall by then, but only to about 90% by 2023.

By then, the NIESR economists say the government ought to be looking to get debt back below Gordon Brown's old ceiling of 40% of GDP. Helpfully, they provide a menu of unpalatable ways to get there.

Five elderly ladies having lunch

It could cut all public spending by 10% in real terms over the next decade; it could raise taxes by the equivalent of an extra 15p on the basic rate of income tax over the same period; or it could raise the retirement age by five years by 2023.

These are the extreme, "either-or" scenarios. You could obviously do a diluted version of all three.

But if you thought a five year extension of all our working lives was a desperate measure to cut government debt, that's a list that could start to change your mind. Especially when I tell you that the 15p on income tax would be on top of the 8p rise from today's level that is already built into the NIESR forecasts.

As the authors point out, the beauty of raising the retirement age, from a budget standpoint, is that it raises revenues and cuts spending at the same time. Income tax receipts go up, and spending on pensions goes down.

By cutting the average time in retirement, you also reduce the gap between what we currently save, and what we would need to save for the comfortable retirement we expect.

That's a big plus in an economy that was saving far too little, even before the credit crunch slashed the amount that those savings could plausibly earn.

Other things equal, the authors reckon that adding one year to our effective working lives would reduce public borrowing by 1% of GDP after 10 years, and reduce the national debt by 20% of GDP over 30 years.

Because most people tend to retire a little before the state retirement age, you need to raise the pension age by about 1.5 years for every one year you want to extend the average working life. That's why the authors say you would need to raise the state pension age to 70 to bring debt down to 40% by 2023.

It all sounds pretty extreme. And it is. Right now, none of the major parties have suggested that a debt stock of 40% of GDP is a reasonable target for less than 15 years' time. Even if all of the chancellor's forecasts come true, the Treasury doesn't expect debt to fall back to that level until 2032.

As the NIESR economists admit, there is also a huge amount of uncertainty around all of these forecasts. Other things are not equal. And anything could happen. There is even a possibility that debt will come back down to 40% on its own.

Finally, you could quibble with the 40% number itself. The Treasury expects debt to be just over 50% of GDP in 2023, which would be pretty low by international standards. (Today at least - who knows what those standards will be in 2023.)

Most economists think that for that to happen, the government will need to do more to rein in borrowing than has been announced to date. But should we take even more drastic steps to reach the arbitrary target of 40%? Many would say no.

But even if you reject the 40% target, it's hard to argue with the basic idea of radically reducing the public debt over the next 15 years.

As Martin Weale points out in the main report, if you assume that major recessions happen, on average, one in every 20 years, and raise national debt by 30% of GDP, then to handle such crises in a sustainable way you need to more or less balance the budget in normal times.

If the Conservatives still want to do it, that is what "mending the roof while the sun is shining" would look like.

By 2023 we will be nearly 15 years on from this crisis, and that much closer to the next one. Assuming that a future government has not put an end to boom and bust, by then it needs to have mended a lot of roof.

Raising the retirement age further, and earlier, than already planned has not featured so far in the doom-laden discussions of future budget cuts. But after reading this study, I think it will.

UPDATE, 11:30, Thursday 7 May: A quick update to respond to some comments.

Raising the retirement age is not a soft option, as many of you have pointed out.

For one thing, as some have noted (eg 7), it's not fair. Middle class professionals will find the prospect of five more years of work a lot more palatable than someone who's worked in heavy industry all their life. That's one reason why any government proposing this change might make it voluntary to start off with.

It might start by offering incentives to delay retirement for those in a good position to do so, rather than directly penalising those that retire at 65. Existing state pension rules already go some way along this road.

I've also been struck by how many have you want to know what would happen to public service workers in all this (eg 8, 14, 25). Already they are already widely perceived to get a cushy retirement deal relative to the private sector. If the comments on this blog are any indication, there would be enormous pressure to reform public sector pension arrangements in the event of any plan to make everyone work longer.

All of these are huge issues we will inevitably come back to. But for those of you who say, understandably, that you don't fancy working five years longer just to clean up a mess made by a lot of banks, remember that we were talking about having to work longer, long before the credit crunch. And for good reason.

Fifty years ago anyone retiring at 65 could expect to live another 13 years. Now it's about 20 years, and that number is rising remarkably fast. "Healthy" life expectancy is not rising as quickly, but it is rising - on average you can expect around 14 years without serious illness. That's a lot more than when the 65 retirement age was set. How much you've benefited depends a lot on class - the poorest in society have not benefited from these advances nearly as much as those higher up the income scale, which makes the unfairness I mentioned a serious issue which would need to be addressed.

But the reality is the vast majority are looking at a much longer healthy life than our parents and grandparents did. It is not clear to me why we shouldn't spend a few of those extra years at work. Nor, at current savings rates, is it sustainable.

As I mentioned yesterday, one of the attractive features of this plan would be that it would narrow the gap between what we save now, and what we would need to save to live well for all the years of retirement we can now expect. Right now, as the NIESR economist emphasize, the numbers simply do not add up.

Many of you wonder where the jobs will come from (eg 30). From where we stand today, it's a reasonable question. But remember we had a big rise in the working population since 2001, for various reasons, and a large rise in the number of jobs as well. There isn't a fixed amount of work out there, and if we extend working lives that ought to mean faster economic growth as well.

There are plenty of important questions to be resolved - as I said before, this is no soft option. But at a time when we hear a lot about spending cuts or tax rises as the solutions to Britain's budget woes, it's helpful to be reminded that there is a third option to throw into the mix.

Comments

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  • Comment number 1.

    "By 2023 we will be nearly 15 years on from this crisis, and that much closer to the next one. Assuming that a future government has not put an end to boom and bust...."

    When we actually get to 2023 we'll find the retirement age will have increased to 75.

    Then again, perhaps, for each year we work between now and 2023, the retirement age will increase by 1 year, meaning we'll never actually get to retire, ever....

    All assuming we're not unemployed that is...

  • Comment number 2.

    Well I don't fancy working untill I'm 70 in order to pay for all this mess. After all my money is already being used to bail out banks, reinflate the credit bubble and underwrite mortgages in order to get house prices rising again, what if we are just paying to start the whole cycle off again in a few years time?
    If the price we have to pay for this mess is working on untill we drop then I for one want to see more affordable housing built so that people can rent cheaply and have more of their own money to save or spend as they see fit. This obsession all the political parties have with tying everybody to a massive mortgage for years of their lives means we all have less to save for things like pensions, so end up stuck between a massive mortgage on one side and high taxes on the other. Great.
    And once we are all working till we are 70, where do we go after the next recession?

  • Comment number 3.

    I've just turned 50 and was amazed to hear the other day banks are seriously offering 25 year mortgages to the likes of myself.
    The need for pension restructure is (one of) the dogs that isn't barking at the moment.
    What the recent credit boom showed among other things is that private provision of pensions is not the full solution - we still had enormous scheme deficits even during the boom years of asset bubble. Now some of the scheme values have been eroded further (seen estimates of 25%+ wipe out). The challenge (not just for the Royal Mail (see R Peston's blog) is to reconcile the funding of public sector gold standard index linked pensions when private provision is unfunded or worth diddly squat - there is no equity in that and the working population will not pay huge taxes (on top of paying off the debt)to fund lavish lifestyles for teachers & civil servants in their dotage.
    Best piece I've seen on this recently was Frank Field on Panorama telling it like it is - we're in an unsustainable bind based on out of date demographic assumptions and no one wants to acknowledge it (or fix it). The other sound mind on this is Prof Ros Altman (also on that Panorama I believe)

  • Comment number 4.

    Such moves are merely shuffling the deck chairs on the Titanic - not solving the problem. The problem is poor leadership, out of date management practice and flawed economics ...

    See previous post below:

    Credit Crunch, Tax Crunch, Pensions Crunch ... entirely predictable outcomes until the style of 'leadership' and 'economics' changes ...

    In a global economy only those capable of offering (and exporting) things other nations want will survive in the long run. This country lost this concept some years ago and/or wrongly believed financial services were the answer!

    'Leanomics', a much wider and far more holistic form of 'economics', looks at community factors too ... such as individual well-being and community contentment, as well as the sustainability of enterprise and the environment. For example, one simple Leanomics test, called the "BUTS" test, can create a great deal of insight by looking at debt alongside the capability of the community to pay it back.

    B=Borrowing
    U=Untapped talent
    T=Trade deficit
    S=Stress

    Trade deficits, untapped talent and stress all negatively impact on a nations ability/capability to pay back debt, and what do these look like at the moment ? I'll give you a clue - terrible!

    We have got into huge debt, sold the family silver, demoralised people, stressed people out, created a broken society, overburdened our children (and our children's children), and still have the 1940's baby-boom to come (with a poorly funded pension system).

    Will future generations stay in this country and pay the price for all this ... I doubt it. Would you?

    Posted by David Clift, a Future 500 Leader


  • Comment number 5.

    "As the NIESR economists admit, there is also a huge amount of uncertainty around all of these forecasts. Other things are not equal. And anything could happen."

    Hmmm, nice to hear these Mystic Megs and Marvins finally admit they don't really know what they're talking about - sweet fan charts, an' all.

    Have these people got any suggestions as to what folk are going to do (and produce) in order to earn money? Perhaps they should ask some Inner City sausage-factor minders about what they're producing these days? Or just read Leitch (2006). We know the NIESR folk can come up with creative ideas in order to get their posts (it's de rigueur to do 'creative' speech), but isn't it time for them (e.g. Lord Turner) to stop spinning? Life isn't a confidence trick you know...despite what you hear.

    I really am hoping to read/hear some sensible suggestions.

  • Comment number 6.

    And why should we work five extra years just to plug the holes in the economy that aren't our fault? MPs and bankers will still retire early with six figure pensions.

    As if it wasn't bad enough having thirty years of debt due to having to prop up failing banks, we now have to work longer and pay more to only partly fix a mess in which we, the public, had no say or control.

  • Comment number 7.

    hmmmmmm there is one much less unpalatable way to cut the projected debt, and that is by putting a big effort into stopping the vast amount of private and corporate tax avoidance that goes on in the UK

    tens of billions per year get stashed elsewhere untaxed, whether by wealthy individuals or big corporates like Barclay's SCM, as extensively reported upon by the Guardian in March

    aside from that we are in a bit of a bind, as you say

    but it is easy for the well-paid elite to contemplate working until age 75 or so - ie when it is somebody else doing it or a nice, high-paid job in academe etc; for ordinary folk doing hard graft, then I'm afraid that the idea of a bunch of economists (who themselves no doubt presume to make lots of money and retire early!) proposing this 'solution' makes me laugh

    where, pray, are all of these older workers going to work? at check-out tills, in offices etc etc! and in every case they will prevent or make it harder for a young person or school-leaver to get a job; perhaps make it impossible in a low-growth, stagnant economy like the UK; old people should generally step aside for younger workers; if they don't, then overall pay will be forced downwards and it will also cause widespread part-time working or under-employment; some employers might like it, but it would only have a real economy-wide positive impact if we assume that total employment rises significantly through economic expansion; is an early retirement age artificially holding our economy back? I doubt it and I am sceptical of this idea from the brainiacs. What isn't paid out in pensions would simply be paid out in increased social security, housing benefit and unemployment benefit

    it could make working in a large office or call-centre interesting as we could be finding elderly workers slumped over their desks every morning

    PS: where did you get that lovely photo of the typical Tory voters?

  • Comment number 8.

    At last - the obvious. As a first step we need to raise public service pension age to say 70 - I would suggest for max pension. Otherwise please tell me how most headmasters, poicemen (let alone judges, MPs and the like) managed to acquire the equivalent of million pound private pension funds. Rip off Britain.

  • Comment number 9.

    Stephanie wrote:

    "There are no good options for cutting government debt"

    Oh yes there are! This kind of argument is a typical distraction by the state.

    ID Cards (6Bn), biometric passports,(3bn) Get out of foreign wars (10bn), NHS's insane computer system (5bn), most government databases(5bn), 15 percent salary reduction for all civil servants (and politicians) earning over 25,000 GBP a year (15bn) - for a start (= 44bn a year)

  • Comment number 10.

    How can we cut spending by 10%? Not easily, I think , if you look at the states of our schools, universities and hospitals. Certainly, we have to abandon all foreign military adventures, including peace keeping.

    How can we increase income tax by 8 + 15 p? We shall be paying the government for the pleasure of working.

    So, I am 57 and self-employed and might have retired at 60 or 65. Now I might have to work on to age 70. Well, the fact is, as things are, I cannot afford to retire anyway. So what difference does it make?

  • Comment number 11.

    erratum (#5) sausage-factory minders

  • Comment number 12.

    It does have the benefit of making the current generation, whose greed and largesse has fuelled the bubble, pay more for it than our children.

    How can we ask Sir Fred to forego some of his pension if we are not prepared to take some stiff medicine ourselves? (Well, quite easily actually :o)

    On the other hand, think how stoic and strong our children will become, working all hours to bail out the country and keep us lot in pensions.

    Hmmm...

  • Comment number 13.

    Yikes !! Do you think people would have liked a choice of whether to work until 70 before the following spending commitments were made ??

    * National ID Cards
    * NHS IT System
    * Huge PFI liabilities
    * New Deal
    * Sure Start
    * University education for 50% of school leavers
    * Huge pay increases for GP doctors
    * Massive increase in 'Disability [sic] Benefits'
    * Huge increase in 'benefits culture

    I'm not saying that none of these are beneficial in their own right, or that some are justifiable forms of expenditure. But they were sold as being affordable in their own right, and Gordon Brown told us that they could be done without breaking the 'Golden Rule' - Prudence for a Purpose he called it.

    Of course, 'Bank Bailouts' were hardly a Labour manifesto commitment.
    And nobody would have liked to see Northern Rock going bust, with the knock-on impact it would have had. But if people had been asked, "Would you be willing to delay retirement for a whole year to pay for it ?".

    Well, I think the answer to that question would have been very informative from a democratic viewpoint.

  • Comment number 14.

    Reducing the already small state pension benefits by paying them later is in my view unacceptible.

    Its also unequal for private sector workers to have to take the strain of this financial mess given that many state employee's can still retire at 55 on final salary schemes.

    Eventually the injustice of this situation will enter the collective intelligence and force the politicians to cut state pension cost and obligations substantially.

    In terms of reducing the deficit the obvious solution is to reverse the policy that caused this mess in the first place - namely excessive public spending. Reducing substantially public spending starting outside of health and education (which only represents about 40 % of total public spending) is a good start - freezing all public sector pay for say 5 years would also be helpful - these will go down much better with the public than reducing state pensions - which is after all an entitlement actually earned from working and paying taxes by people during their working lives.

  • Comment number 15.

    For further context, look at the cost of Social Services (Social Work) and Probation which is being eroded by New Labour's creation of The Third Sector (see tbe scope of the newish Charities Act (2006). The Third Sector is in reality 'New' Labour's (i.e. not Old Labour) more palatable term for Private Sector. So, when you see and hear all the emotional Baby P and Laming Report talk, just remember that, like all the rest of the 'inefficient' nanny state talk, this is not really in aid of improving services and saving money but in aid of wrecking Public Services so that more opportunists can make money out of the vulnerable at taxpayers' expense. Whilst to some people this venal anarchism is obvious, to others ever more vulnerable to verbal spin.......now they have been 'educated'....

  • Comment number 16.

    1 Mr Tweedy

    Ah number 1. Could always give jobs out as part of a tv reality show, Oz is showing the way. : ) lol, you think I'm joking.

    You are looking at the disintegration of boundaries. But on the whole I am optimistic, it is rebooting of values, nothing else. People have a marvelous ability to redefine.

  • Comment number 17.

    DEBT COULD WELL EXCEED GDP FAIRLY SOON.

  • Comment number 18.

    7 somali

    The idea is that you push the pension age out progressively towards 100 but leave the kids in school, school leaving age to rise progressively to 25, still live at home etc etc. Those parents working pay parental contribution to study. Neat. Solves youth unemployment and pension problems. 25yrs to 30yrs spent in apprentice placements at less than the minimum wage, as apprenticeships are excempt from minimum wage statute. For those who go to uni extend the uni course and tack on extended work experience. Brill. Its just an extension of whats going on. I think these guys are really clever. I'm sure Brown Bear Market has the muh-honey.

  • Comment number 19.

    so the largest group in the UK is on average 40 years old, it is also the largest in terms of numbers, make them work until 70 (thats if they survive that long) where are the jobs coming from ?
    better idea legalise euthanasia make everyone who hit 65 take a pill do your bit for queen and country , but minsters and the elite get a no pill choice because we need them

  • Comment number 20.

    The only reason that Britains public debt appeared to be only 40% of GDP was because the GDP was a FUNCTION OF the inlated debt bubble foisted on the nation by the pollytrickall conmen on sterroids that claimed things could only get bett err.

    Huge ammounts of public money are being used to sustain the illusory GDP TO HIDE THE FULL HORROR OF THE DEBT MOUNTAIN [MT NEVEREST]that will have to be scaled back by those destined to die on its slopes before ever aquiring the promiced pension .

    As long as the cheif guardiants of the pension pots tend to be approaching retirement themselves,then it is hardly likely that imminent payouts will ever reflect proportionately present and future pension liabilities [any more than it did at the royal mail pension fund ],which will produce a likeliehood of the cupboard suddenly becoming bare, when too many mother huboards turn up at a time of demographic change or economic downturn .

    Proving that so called funded private pensions were no more properly funded than the state pension.

    The pollytitians[with guaranteed pensions ,yes guarateed to leave others with nothing, like the fiasco at equitable life ] have to maintain the illusion that the toxic waste alaughabet soup scaaam knowingly produced by the bankstering manurefacturing industry to create the illusion of properly funded pension pots is recoverable, in order to maintaintain pension payouts to existing and imminent retirees[including the highly paid stocking fillers working in the banking / pension industry.

    It is no wonder that Surf Red AFTER SAILING THE OCEAN WAVES PREFERED HIS GUARANRTEED PENSION POT UP FRONT so he could sail away for a year and a day to the land where the bung tree grows .


    The cupboard is bare,ask yourself the question, "am i[chicken little] being well and truly plucked by the pluckerrs having a plucking good time" ?

    if so

    Only wallace and Grommit can save us now.

  • Comment number 21.

    I'm not overly happy about having to work until I am 70 - 75, much as I enjoy my job.

    The Government obviously does not feel that it has a mandate to pursue policies to sort out the economy. After all it postponed all of the major issues in the budget until the next parliament. Why not therefore obtain the mandate - call an election. What have they got to worry about, Gordon Brown has saved the World single handed and the economic crisis is not of their making. Its America stupid! The current polls are obviously a con perpetuated by the Tory press.

    Am I the only one who sees that "we will take any action necessary" a phrase used by Mr Brown when ever presented with a difficult issue, is a euphemism for "We haven't a clue what to do".

  • Comment number 22.

    Stephanie - what net debt total is being predicted? 700bn now going up to ?1.4trn or more? What servicing costs are attributable to predicted debt ? 50bn per annum? Does this include unfunded public sector pensions and bank bail-out liabilities. Debt servicing costs alone could replicate a big spending department in its own right. Surely, retirement age adjustments just fiddle around the edges. Fundamental scaling back of the State is unavoidable isnt it? With banks making profits out of the spread between what they pay on savings and what they charge borrowers going forward, why not start with a specially targeted tax which recovers revenue fairly from them.

  • Comment number 23.

    The Government, those who were to look out for your interest and didn't, now have a new plan. With the smart bankers,economists and investment firm intellectuals who caused this mess, they brillently declared that if they raise taxes and delay and/or cut benefits it has a positive impact on the debt. My, have they been working their tiny little brains over-time. I suggest we look for some new leaders with new ideas and trash the old system that seems intent on rearranging the deck chairs on the Titanic. Maybe, just maybe, some of the money should come from the very industry that caused the problem...taxes on future profits...oh, but that money is already designated to purchase votes. We could all work till we die, that might help...where is your patriotism. Bringing back Serfdom?

  • Comment number 24.

    What a great idea. If you raise the retirement age then we increase the labour force. Maybe we could use all this extra labour to work in a few large scale mirror manufacturing plants and then deploy further labour to burn them down. That way we increase productivity by having the same facilities produce both the smoke and the mirrors.

  • Comment number 25.

    No doubt those who work in the public sector would be horrified by the thought of the pension age being raised to 70.

    But with the exception of those people, the idea will make an awful lot of sense to everyone else.

    There is no way this country can afford to pay index-linked pensions under existing arrangements to public sector employees retiring from now on. Those pensions are paid from current taxation and are generous on a scale that only a handful of notorious bankers would not envy.

    Public sector pensions have to be curtailed and one straightforward way of doing that would be for pension payments not to commence until age 70.

    Of course nurses, police officers, and local and central government staff do a decent job of work - but there is no call for the grossly over-generous pension schemes which they currently have. No one in the private sector gets these deals!

    It would then be a matter for personal discretion if an individual employee chose to leave work before reaching age 70 (with an entitlement to a deferred pension).

    I take it that the National Insurance Retirement Pension would also commence at age 70 - so a fair deal all around.

    Ashill

  • Comment number 26.

    Bit of a no brainer that one Stephanie, it was always an unsustainable utopia for the majority to expect to have 20 years plus of retirement...thats a long time !

    Personally I would rather be useful for as long as I can be, they should look at something more in line with our aging process like a phased reduction of working days in parallel with increasing supplementary state pension on a sliding scale.

    i think that way people would still feel they are getting extra 'free time' as they grow older. Having an abrupt cut off at 65 is simply too crude an instrument for the modern world.

    jericoa.

  • Comment number 27.

    24 arm n leg times

    The thing is state pensions and pension credits are more than JSA and the individual savings threashold for JSA is lower than pension credit. If you are above the threshold you have to live on your savings. So if the same people are JSA instead of state pensioners or credit pensioners then considerable savings are made. If anybody has their own seperate pension provision then you can still skim it via the tax system, that has already been started. I told you they would be up to this sort of stealth wheeze. You were arguing the toss the other day when I said you can pick any figure you want for unemployment, but the biggest culmulative economically inactive figure is the problem. Next stop BTW - means testing for sevices and healthcare, and they are vaguely proposing what amounts to a tax to collect your garbage. I havent read through all the squiggles and whatnot in the bumpf of the report but you dont have to to know what they are after. Tell people you are freeing them when you are constricting them. The whole outcome will be to make anybody with wealth poorer to pay the recession bill, that is the objective, and many things that have been brewing for decades will suddenly be done under the message that things have got to be done and the majority will support it as a default. I asked you if you had used low cunning techniques in maths, this is an example, Somebody has actually got a low cunning solution technique named after them somewhere but the name escapes me. The issue is not is there enough work, it is where can we get hold of the money. If the minimum wage is a problem then you have categories that are outside it to solve the problem, eg apprenticeships, JSA, training, education. The starting point may not be intending to get to the resultant end point but logic and pressure drives policy there. This is the decline management model in force, cost cutting, low risk. There is plenty of work in any country, but it will not be called work because that means it has to have wage, it will be called something else - social enrichment, experience, giving back to the community, worthwhile, you get the picture. In all probability you are looking at the start of an economic cast system. It is devil take the hindmost. Problem is where has good natural resources, a low density population, low total population, and a younger population profile, because that sounds a good longterm bet. Hmm.

  • Comment number 28.

    I doubt many of you would want your children to be taught by someone in their 60's, hopelessly out of touch with a generation of children half a century younger than themselves.

    As a 30 year old teacher I can say that the job requires very high energy levels to cope with the demands of workload and the 'exuberance' of teenagers.

    According to the NUT half of all newly qualified teachers leave the profession within 3 years of qualifying. Yes I know there has been a recent uptake in teacher training places, but reality is a little different to the government advertising spin.

    I'm near the end of my 5th year and I don't think I'll manage any more than another 10 years before becoming too bitter and twisted to perform well in the classroom.

    If any teachers actually make it to the age of 60, all credit to them, they deserve their hard earned pension.

    Hapjacobs

  • Comment number 29.

    The real problem/paradox is that as we produce ever more dumb people, the ever shrinking brighter but older section of the population will find the behaviour of dim youth ever more unbearable, whilst youth will desperately need older people to keep baling them out from the mess they keep making for themselves.

    But hey, that's dysgenesis...Go on, tell me it isn't happening.

  • Comment number 30.

    So extending the State Retirement Age to 70 WILL help us to reduce our Debts, while at the same time we are INCREASING the School leaving Age from 16 to 18 Years to keep our younger Generations off the Streets while being tested and retested over and over again with their heads forever buried in a mountain of worthless paper-work while on Government training courses, and further Education Schemes.

    While, in making the 18 to 25 Year olds sit around and spend what is part of the most Active years of their lives turn-stylling themselves around courses of worthless training when we cannot even find any work today already for the current 3 Million Plus in numbers and rising that are out of Work and Unemployed, while there is being considered the idea that not only should we further and extend the time that it takes either an Unemployed Person, or a Jack and Jill of ALL Trades and Master of None of 18 to 25 Year olds to get ( IF POSSIBLE ) into Employment by actively promoting that Pensioners over 65, having given by then the BEST Years of their lives to the desireability of Active Employment, that those that have by then have manage to survive a lifes Work - Cycle of perhap from 15 Years of Age to 65 Years, that their just Reward for a lifetime of Employment is to be told too hobble on until they reach 70, that is of course if they live and survive to Retire by then, once they are well and truly knackered.

    Its ALWAYS O.K. for over - paid Politicians whom have never in their whole lives had a REAL JOB, for all these People all of whom have sat NO Formal Qualifications in examination to Pass-Out into becoming an M.P. to some how sit in judgement of the Working - Classes by telling them that they MUST carry on in Employment until they reach 70 Years of Age, while most of these same Politicians THEMSELVES will not pass-over taking early Retirement at between 50 and 55 in Years, for lets face it anyone can sit upon their backsides in Parliament talking One-upmanship, and passing mountings of worthless Legislation until they reach 70 while drawing Expenses, and making a complete and total Cock-Up of everything from the Economy to the Recession, while today the "only" things that is Booming at their Hands is the Bust of this Country, then it really is now past the time in the U.K. for a complete over-haul of this Countrys Political System, and the Powers that the People invest in its Politicians.

  • Comment number 31.

    The statistics say if you make it to 50 you can expect to live to 89. So people who retire at 65 will have an average of more than 24 years pension. Plus they already had say 21 years before they started work i.e. 45 years not working and 44 years working over an average lifespan. The 25 year pension is funded by saving 10% of salary over the 44 year working life. The pension system only worked because people died younger and there were more young people paying taxes and buying assets than old people drawing pensions and selling assets.

    Pension age has to rise automatically with life expectancy. Every year we postpone facing this is a year those of us who are not close to retirement are getting ripped off paying for people retiring now to get better pension conditions than we can ever see ourselves.

    We also have to stop misusing early retirement as a 'nice' way of making state sector people redundant and bailing out pension schemes which made impossible promises with billions of taxpayers money. The worst example of this was letting RBS divert £800M and HBOS £500M of the govt equity funding into their underfunded pension schemes. It is good to know there is now enough cash to pay Fred Goodwin's pension.

  • Comment number 32.

    Dont be worried folks by this report its just the last line (hopefully) in the reductio ad absurdum proof that the 15th Century Venetian pre-machine age, pre-computer age financial system we use is utterly not fit for purpose.
    Retirement at 70 ! What is the point of having machines and computers ? Cavemen got to retire before 70 !
    Weve got some short term fixes : We can stop the EU grant to pay the poor French and Spanish £6 Billion per year to pay their young fit healthy teachers to lie on a beach for 13 weeks a year while we tell our pensioners to work till they drop (and at the same time allow the Aussie Dr Death to do his Euthanasia show to demo the new post 70 pension arrangements its not unconnected abortion for grannies is on its way and we abort 600 kids a day in the UK without it hitting the headlines of every newspaper every day : First they came for. And then they came for me its an old song you're not that special that it wont happen to you.)
    In the medium term weve got to stop looking at money and saying its wealth. Money is only a number that is a claim on wealth and is independent of real wealth. We are at the point of the highest level of technological advance we have ever known so we are wealthy beyond the dreams of people only a few hundred of years ago. If we showed some one from the past our wealth theyd be amazed, if we told them that people have to work till 70 they would think we are mad and we are and/or our numbers are wrong totally wrong - a pile of rubbish a far bigger pile of rubbish than giving a million un-employed hill billies $200,000 + to buy wooden shacks off each other and valuing the loans to them as AAA. We need a financial system that does reflect our real wealth: NEFS Net Export Financial Simulation is a starter for ten in this direction www.worldnews.blog-city.com
    In the long term well we wont have long term unless we sort out the medium term and pretty quickly - if you are under 50 then there is a 'free' government needle with your name on it just waiting for you - far more "practical" than that gold watch they used to hand out.

  • Comment number 33.

    Given that neither public pensions or public service pensions are funded and we have all effectively been 'paying for our parents pensions' rather than saving for our own, then it it self evident that:

    1. There won't be enough people to pay for my pension (I'm 42)
    2. Without bold action (to restrict pension costs) we will bankrupt ourselves trying
    3. Local services will be axed while local taxes will continue to rise (to pay public service pensions)

    The sooner we start to correct this (before all the baby boomers retire) the better our chances of the UK surviving as a coherent entity with a currency thats still worth something.

    PS. I don't consider exponential growth of UK population an environmentally-sound option

  • Comment number 34.

    Very interesting, increasing retirement age is option that should be looked at. We are living longer, but also there is the work life balance issue. Most people miss the interaction and drive they get from going to work. What we need to evolve is a more flexible work approach that allows may be shorter hours, etc for older people. i.e. similar flexibility we are giving to new parents that are staying in work.

  • Comment number 35.

    Forget about state pensions. NIC is just one giant government Ponzi scheme that even Bernie Madoff would applaud.

  • Comment number 36.

    When Pensions first started, the life expectancy of people was shorter than today, pensioners tended to only get this for a few years before dying. Nowadays, pensioners on average receive their pension for 15-20 years, much longer than their predecessors (who may have had a tougher working life).

    But it leaves a bad taste in one's mouth when the reasons for raising the retirement age seem down to the actions of certain people to bring companies to their knees, make a fast buck and then retire early.

  • Comment number 37.

    I'm 64 and so approaching retirement, but I, like so many others, have had my savings and my paltry pension fund cut by 30-35% due to the "credit crunch". As it happens, I don't mind working, preferably part time, to add additional funds, but what of those who cannot,
    e.g. those who do physically demanding jobs/high stress jobs etc? It's one thing to say "Oh, we'll just raise the retirement age" but it's entirely another for those people who simply are unable to do it. What of them? Are they to be pushed on to long term sick benefit? If so, where's the saving?
    How about the same retirement age for all, say 65? How about making those state employees who retire at 60 on inflation proof, 2/3 rd final salary pensions pay for them fully and not out of current tax revenue as now. I don't begrudge them their pension, but it should be fully funded by them and their employer just like private ones. This would cut goverment spending quite a lot and introduce some equality into retirement provision. The gap opening up between state and non-state employees is going to cause serious trouble within 20 yrs if it's not tackled fairly.

  • Comment number 38.


    Well no 36 has it right, todays pensioners are all living longer, better lives. Many already give back to society by doing voluntary work, becoming councillors etc. Rather than making people work again (since needing to deal with the crisis starts now not later) perhaps we can ask all that are physically and mentally able to do something for society for a couple of hours a week. I'm sure that there are lots of things where people can help. After all it could give many people a new interest in life and help us all to feel in it together. No I'm not a pensioner yet, but I already give up a few hours each work to help a charity.

    On the other side how about getting rid of all these new benefits that involve civil servants eg child benefit, pensioner credit, insurance tax, council tax benefit etc etc. At the same time with immediate effect abolishing all tax bandings and "allowances", raise the tax threshold to say £15K and do a flat rate of say 20% for all those on PAYE and those paying up front. By that I mean those not on PAYE could volunteer money now fill in a simplified tax form and if they pay later contribute 25% instead to cover the cost of collecting it. This will hopefully promote working and running a business, and a much smaller public sector. If the figure work out we should then be able to increase basic state pension.

    Finally I also agree with some of the suggestions of #13 for cost cutting exercises.

    Just a few ideas probably not right, but can I be any more wrong that the present govt who are continuously revising their figures or ignoring things.

  • Comment number 39.

    Stephanie - this proposal seems nothing short of mad to me for all sorts of reasons and could only be proposed as the best solution by a bunch of economists who are well provided for in their retirement.

    I presume that the proposal is to increase the age for entitlement to the state old age pension rather than public sector pension arrangements. If this is the case, then will public sector workers continue to receive relatively generous pension provision which will allow them to retire pre-70 while private sector workers have to work to 70 pushing trolleys in Asda to pay for this? In short, there is a risk that these arrangments will simply excerbate the public/private pension divide unless public sector pension arrangements are reformed.

    I also have to question to what extent the proposal will save money. I am fairly certain that much of the potential savings may be offset by increased incapacity benefit payments by the government to people in their 60s who are unable to work.

    You also need to question whether it will be politically acceptable. If the age is raised to 70, then there has to be a fairly good chance that many people will die before they are entitled to a claim a state pension. I suspect the gut instinct of the electorate will be that it is unfair for workers to pay tax and NIC potentially for over 50 years but never receive a pension because they die too soon!

    I accept that there are tough choices to be made but I can't see how this proposal makes sense. I have to ask if most individuals would make a conscious decision to work until they are 70 years to fund a lifestyle beyond their means. I am sure that most would not but would, I they are able, reduce spending to retire at any earlier age. This is certainly what I would do and this is what the UK needs to do. The main focus needs should be in cutting public sector expenditure on services. We need to accept that the public sector has become too big over the past 10 years and needs to be cut back substantially.

    On the subject of the likelihhod of another financial crisis in the next 15 years or so, I think that unless the fundamental issues which have caused this financial crisis are addressed, then we are heading for another crisis much sooner. In fact, there is a very good chance that this will happen any way. I believe there is a very strong likelihood that constraints in oil and gas production will drive up energy prices within the next couple of years which will kill off any hopes of a strong recovery.

  • Comment number 40.

    I have to comment on Thorntonheaton's comment yesterday about being 'white British'. Who said anything about British being white? People born in this country are British because they were born on British soil. I was talking about how the media constantly do this Country down at every possible moment and how we need to bring back pride of being British into this Country.
    Most journalists don't actually have personal experience of what they comment on. They critise or comment on teachers, doctors, nurses, the police, politicians, local authorities, house prices etc., in fact pretty much everyone and anything apart from themselves. We live in a global economy but also a global communication age and what they write gets read or watched all over the World and the harm they are doing to this country is immense. They have far more power to influence than any Government, what ever their political bent.
    They talk about immigrants and foreign workers in a very derogatory manner and create tensions in some communities but all those Brits who have gone to Spain, France etc are also immigrants in the eyes of the Spanish or the French but the press call them expats!!!! What is the difference. I guess they are OK because they are British!!!!
    My own brother in law has gone to Spain to live and when I made this comment to his father he was horrified that I could possibly make the comparison with immigrants who come to this country!!!!!!!
    My son went to work in Japan and my daughter Germany, Sweden & France so migrant workers I guess?
    or should we say human beings just having the right to personal choice?

    When I have completed application form for jobs and those ridiculous sections about what my nationality is, white british, white muslim, white what ever. or other!! I always complete the form saying I am a member of the human race, no religion!

    The financial sector caused the huge problems we now face but the press and the media have exacerbated the problem and made matters much, much worse and will continue to do so unless they start talking in positive speak about this country and the people who live in it. The situation will not improve until we have confidence back.

    Of course there is much wrong with this country ( as in all Countries) but there is also a lot to be very thankful and grateful for. If we had balanced reporting we would know what goes on in other Countries, how they are coping with the global crisis, we might even learn a thing or two and we might also start appreciating what we all take so often for granted in this Country.

    There are too many experts having too much to say without actually substantiating what they say. David Cameron has said an awful lot about what the Labour party have done wrong. I don't know whether he is right or wrong and I suspect he doesn't know if he is right but it sounds good and looks as if you are proactive. It is so easy to stand up and criticise and pretend you are actually contributing in a positive way What he hasn't said as far as I am aware is what he would have done faced with a financial meltdown. Would he have let the banks go down, would he have protected our savings, if so how, without borrowing money? and how would that have impacted on our standing in the World when every other economy appears to have shored up their own financial sector.
    What would he have done to protect jobs in the UK. What would he have done to help pensioners who depend on interest from savings? So many questions remain unanswered?

    Why did he not see all this coming and shout about it before or perhaps he and his friends were enjoying seeing their own personal wealth grow at an obscene rate? He and all the experts knew they couldn't say anything because investment in this country would have drained away overnight like a flood. This Country could not have slapped tighter rules on the financial sector unless the rest of the World acted at the same time, it would have caused financial suicide to London.

    I have no objection to people making comments, if they can then come up with a credible solution. Its the easiest job in the World to pretend to have all the answers, its far harder to then substantiate your own take on the matter.
    In a crisis people need to come togther not pull in opposite directions but we have a generation of people who have been told to think about 'what's in it for me', 'how can I get away with doing very little and getting a lot for it', 'how can i make a fast buck on the back of someone else'
    Not their fault but until we change attitudes and people realise what they say and do has much wider implications beyond their own little world and that working together for the benefit of all does and can have enormous benefits we are not going to go anywhere very fast.
    With so much negativity around the only way is down.

  • Comment number 41.

    lukeo1980 # 36

    "But it leaves a bad taste in one's mouth when the reasons for raising the retirement age seem down to the actions of certain people to bring companies to their knees, make a fast buck and then retire early."

    Curious how almost everyone is blaming bank/company directors when it was the government who gave them our money in the first place!

  • Comment number 42.

    hapjacobs has hit the nail on the head - raising the age to 70 is fine conceptually but what jobs will people do? 70 year old teachers, nurses, police officers??? I am 55 and I already forget where I last put my keys and glasses etc. Who knows what I will be like at 65.

    I'm a self employed computer programmer and keeping up with all the new stuff is really hard now! I have already slowed down, noticeably, in terms of productivity compared to 10 years ago. In 10 years time? Hmmm. We will need a work-age-scale that changes your duties and hours as you get older. The experience of older workers should/could be used to train newcomers. If this is expected from the outset then there will be no shame in working down a job hierarchy the same way you worked up it.

  • Comment number 43.

    LibertarianKurt (#35) "Forget about state pensions. NIC is just one giant government Ponzi scheme that even Bernie Madoff would applaud."

    Except this one is legal. I know you don't approve of the state making things legal and illegal, but there it is, they all do it. Here and in the USA, the state even made it legal to de-regulate the markets and disempower itself (although few people appear to have grasped this). Now they are empowering the public/people to pay for the feckless investments of the money-lenders - who no doubt will find more devilishly opaque ways to lend the former saps' money back to yet more feckless people whilst getting them pay for it when it all goes wrong again! It's all a matter of limited cognitive ability - STM/Channel-Capacity, IQ etc - the more 'dumbos' in the population/market the better as far as these predators are concerned. And you call that freedom....for whom?

    Alas, it seems that anyone who wants their state back now is fair game as an evil-doing, mad etc, fascist/nazi....

    .....hsssssssssss ;-)

  • Comment number 44.

    Stephanie, will you please stop saying that people who put money into a pension fund are saving; saving is merely deferred spending. I tried to educate Peston on this point, but BBC journalists seem intent on colluding with this government in conning the general public. Any time somebody promises to return more money than they are given, then that is investing. Saving is a virtuous verb, that is why politicians use it. If you don't believe what I am saying take a look at what the government said this week about the Equitable Life fiasco. They said that INVESTORS must take responibility for their investments.

    So, when politicians what us to put money in, it's called saving. But when we want a fair and just return, it's investing, which is gambling under another name.

    Please correct your terminology and always use the word investing when you are referring to; savings accounts, pension funds, and any other form of making money from money. Only the money under the bed, in your pocket or buried in the garden is saving, all the rest is investing - gambling.

  • Comment number 45.

    doggerfisher (#39) "I don't consider exponential growth of UK population an environmentally-sound option"

    Is that irony? ;-) The UK TFR is about 1.8. That includes the disproportionate number of births to Muslims (who have rules about usury hence the great efforts to secularise them I cynically suggest). The UK TFR is high compared to other European countries, where in Eastern Europe it ranges from 1.1 to 1.3. With a TFR of 1.3, a population halves in two generations (i.e 60 years), with at TFR of 1.1 it does so in 30 years.

    Replacement level is 2.1!

    Sadly, birth rates are also skewed so the less able produce more and the more able less... That's 'good' for the sub-prime lenders out there though.. ;-)

    PS. Good people are bright and'Conscientious'. Clever people often seem to be deficient in the latter.... Clever people got us into this mess, they're incorrigible like stupid people :-(.

  • Comment number 46.

    Acually the simplest, though some might say least acceptable morally or ethically, way to solve this debt crisis is to default. We would lose our cherished AAA credit rating for awhile but so what. We did so in 1976. It was a tad embarrassing at the time but was soon forgotten.

    The assumption has also been made above that HMG will be able to borrow these vast sums. If the gilt markets say no at some point in the coming months, what then?

  • Comment number 47.

    I think our former chancellor's economic policy of "prudence" or rather "profligacy" as it is now known, has led us to this ridiculous position. The government really does at some point have to look at how it spends (or rather, wastes) our money. I think it is clear that there are too many civil servants, too much corrupt local government and too many dodgy perks for central government that are rather conveniently "within the rules".

    We have seen far too much in the way of pledges for long term expensive projects which do not relate to what the public wants and can afford. We see too much waste, we see too much failure, too much prevarication - and it's all just swept aside. The government has no grasp of the public purse but sees it as a never ending supply of easy money for their purposes, for their glory, for their self indulgence and not for the benefit of the people they are supposed to be working for.

    The first focus surely has to be on reducing wasteful costs within governmnent at all levels. Others here have already commented on projects which could easily be dropped or shelved without hitting essential public services. But all services must be looked at to make them more efficient. Certainly the pensions of government workers must be looked at - as the article points out we are all living longer and that costs.

    Government lead the way - show us how you are fixing the problem from your side.

  • Comment number 48.

    so we going to make the poorest work hardest for pay for this then

    justice, Fairness, Equality ??????????? new Labour values ????

    so if there are jobs too that is too do the work ?????

    Now bakc to british jobs for british workers then because that is what will be required to fulfil this crazy plan.

    Now the PUMA LEP for the British forces work has been given to Canada where the British Soluton for far better means I'm not going to have a job in 9 months let along 25 years time.


    Place this order for better equipement in UK and not Canada is solutions that we should be looking at first and holding this sorry mess accountable for.

    One option would be to cancel PUMP LEP but if they are going to place a order then it should be in the UK. last time we did this with the Chinooks MK3's we had a £500m disastor and then the brits came to the recuse.

    Know that the sort of reporting we need to get out of this mess

  • Comment number 49.

    JadedJean # 43

    "Except this one is legal."

    Yes, the state made it legal to swindle people out of their hard earned money. The difference between what Madoff did and what the state is doing is that Madoff didn't threaten anyone with jail if they didn't cough up.

    Madoff was a crook. However, the government is a more devious crook.

  • Comment number 50.

    Good to see that you read the blog and take on board the comments

    but "Various Reasons", one of which is imigration both legal and illegal if there is a difference has caused a big increase in the people looking and taking them jobs, is a PC way of hidding that fact.

    This is also a soft options when compared to having to make spending cuts in area that would effect your core vote as a result of the sovietisation of some regions of the UK.

    Now that is the really hard option.


    So we can stay with the never never land of economic policy of GB+AD and put of the day of recogning to some far point in time , like my grand childrens then. very deciet way of sorting out this mess.

    lets have some more reporting on some of the harder options that should be being taken.

    If ever there was a budget for only one person to keep his job at the expense of everybody else then 2009 was it.

    Can you here the phones/faxes and paper flying around

  • Comment number 51.

    Steph
    I admit confusion over what's included in the government's borrowing figures. We know that a major factor in increasing debt was bailing out the banks. I have not read anywhere what assumptions are being used when these are returned to private ownership. While clearly the government will not make a profit on the deal (as the Swedish government did in the 80's), the value of the government holdings is very substantial and will realise significant sums.
    Also, I understand that when an institution becomes more than 50% publicly owned, that institution's debts have to be consolidated with the public borrowing figures. Clearly this means that while the banks are more than 50% owned, the public borrowing figures are distorted. When sufficient shares are sold to take the holdings below 50%, public debt will drop significantly as a result of this accounting adjustment.
    Is this correct Steph? Are there any bloggers out there who can give me a definitive answer?

  • Comment number 52.

    49. LibertarianKurt

    When are you going to abolish speed limits, driving tests, MoT testing and the Highway Code? You do want liberty on the roads don't you?

    PS - What part of America are you from? (you say "ponzi scheme", I say "pyramid scheme"......let's call the whole thing off).

  • Comment number 53.

    LibertarianKurt (#49) "Madoff was a crook. However, the government is a more devious crook."

    But weren't people like Madoff the very sorts who effectively campaigned and lobbied for the types of (libertarian/free-market) governments which we have had the pleasure of since the late 70s? He just confessed when times got tough for him. People forget that.......;-)

  • Comment number 54.

    #27 glanafon - You are pretty much on the money. However the numbers must matter otherwise there would be no need for the intellectual gymnastics necessary to so consistently manipulate, massage, and hide the numbers.

    Take a look at what Ms. Flanders writes: For example " ...in the event of any plan to make everyone work longer." or "...that you don't fancy working five years longer..."

    She is perfectly aware that whilst certain individuals may work longer in aggregate people will just move from one set of benefits to another lower yielding set of benefits. So why write this? Why not just spell it out? She knows all the words, it´s not accidental phraseology, and is fully consistent with the "on message" agenda never to recognise how many people there are in the UK of working age who are not working.

  • Comment number 55.

    So NIESR give us the options of a 10% cut in government spending over ten years, income tax in the region of 50p or raising the retirement age to 70.

    Of course, as a recipient of public funding they are not going to opt for the 10% cut in government spending, are they?

    Might I suggest a 20% cut in government spending over five years, or even a 50% cut over two years?

    Some would say I am just being ridiculous but I am being serious.

    When LLoyd George brought in the ten bob pension his intention was to improve the lot of the elderly poor who could not work. May I emphasise the words COULD NOT WORK! My father got terminally ill at 68. Now Lloyd George's policy ushered in the begining of the welfare state. This lead eventually to unemployment pay, welfare support, old age pensions and all the paraphenalia of the bureaucratic social-democratic state.

    Yet all of these civilised measures have been allowed to wither on the vine these last thirty years. Now because the state has spent all the money on NIESR and other useless mouths then it seems it is these measures that must stop.

    This is just not good enough. If the public is not to get the benefits of the social-democratic welfare state then why should anyone else? Shut the state down and we can all go back to self-provision.

    Maybe the answer is to abolish the state and the debt will be paid back in a year. After that we will all be rich!

  • Comment number 56.

    Congratulations on responding to the comments. It shows a great respect to us - perhaps more than we deserve - but I appreciate it!

  • Comment number 57.

    "Many of you wonder where the jobs will come from (eg 30). From where we stand today, it's a reasonable question. But remember we had a big rise in the working population since 2001, for various reasons, and a large rise in the number of jobs as well ...

    From where we stand as a nation "where the jobs will come from" is THE KEY QUESTION - as previously it was created by a lot of 'spin' and increased Government borrowing- so is the answer MORE 'spin' and Government borrowing?

  • Comment number 58.

    Surely, as Steph mentioned in her update, the whole process of realigning retirement aspirations with changed demographics is one that has been simmering for some considerable time.
    We are about to start the female retirement age transition from 60 to 65, and this will be completed in 2020. We have also had a whole raft of legislation on age discrimination which outlaws mandatory retirement ages in contracts and, although there is still a default retirement age of 65, employees have a right to stay on if they wish. Partly as a result of this there has been a noticeable change in attitudes to older workers, with part time and less physically demanding opportunities for older people to earn - just look at your local supermarket or DIY store to see the number of 'golden oldies'. This does seem to me wholly compatible with pushing the retirement age up to say 66 or 67. The important thing is to recognise that people of that age do have a contribution to make, a market is developing for jobs for those people that are rewarding for them and enable their skills to be used for the benefit of the wider economy.

  • Comment number 59.

    What a wonderful idea !! Now we can send the Dad's Army 65 year olds off to fight the Taliban. I'm sure that should solve a lot of the government's problems !! Oh, and we can have 70 year olds dashing into burning buildings to get people out !! Of course, they'll be given all the necessary equipment they need; motorised Zimmer frames, hearing aids, etc. !!

  • Comment number 60.

    Poweromics = People use position and power for their own personal gain, based on poor moral values, self interest and greed.

    ... Who will pay ... honest, hard-working people. Who will avoid it ... those in positions of power ... until hard-working people realise the world is about to change forever, and for the better.

  • Comment number 61.

    Whilst there has been a lot of talk above regarding public sector pensions, why has there not been the same level of criticism of the private sector provisions?

    If your private pension pot has been decimated why are you not asking why? Whay are you not banging on the boardroom doors of those companies who continually raided their pension funds? Why are you not banging on the doors of the fundmanagers who promised so much for your money purchase schemes, took their exhorbitant fees, failed to protect your interests and left you poorer? Why are you not banging on the doors of the financial institutions who conned you into endowments and actually paid litle into your funds over the years when the markets were continually rising? Why are you not banging on the doors of the legislators who felt that it was 'reasonable' for pension chemes to carry the same level of financial risk as any other investment (that includes both parties)?

    The public sector provisions do appear out of kilter at the present moment. However, how many of you complained when public sector wages were kept low using future pension payments as a carrot?

  • Comment number 62.

    MrTweedy # 52

    "When are you going to abolish speed limits, driving tests, MoT testing and the Highway Code?"

    A bit off-topic but, nevertheless, I shall attempt to answer your question. If we apply the "rule of two"; that is that it costs the public sector roughly twice as much to do anything as the private sector, then highways and roads are no exception.

    Therefore, my suggestion is to privatise them. The private owners of roads would then be able to impose their own speed limits; some owners could have stringent limits, others less so. In fact, the roads would be safer too because private owners - incentivised by the profit and competition motive - would look after their property better (than the state could ever do!) by wanting to provide their paying customers with a continuing improving service.

    As for testing and licensing of vehicle owners - why do we need government mandated tests and licences to prove that we can operate a car, truck or bus? I mean, how many idiots have you come across on the roads who, more likely than not, have government issued driving licences? I think a far better way would be for private insurance companies to issue certificates of driving competence and vehicle safety certificates in addition to providing insurance cover. After all they (insurance companies) would stand to lose a lot of money if they issued these certificates willy-nilly like the government does when it doles out licences and MOTs.

  • Comment number 63.

    LibertarianKurt,

    Your scenario sounds nice, but as a private road owner, I would spend the bare minimum on road maintenance, hire the cheapest, most unskilled laborers from afar and avoid as much investment in quality control, training, equipment, safety as possible in order to maximize my return so I could purchase more roads to squeeze out the competition in order to charge higher road use fees, thereby continually providing me and my shareholders the maximum value for our investment and attracting ever-more capital!

    It might not be long before even Libertarians begin crying out for more government regulation, but that would not be a problem for me, because I would have all the decision-makers (and their families and friends) on my payroll! We would all splurge on fancy living until the roads got so bad people would demand changes, so the government might offer me either a nice price to purchase the roads back from me, or, since I have the administrative apparatus and political connections, the government would simply give me taxpayer money to invest back into "society's" infrastructure.

    Of course, I would certainly funnel SOME of that money to "pet projects" important to certain of my favorite politicians - right before election time - and spend the rest in unnecessary capital investments to reduce my tax burden. Please push for this with your local representative so I may begin assembling investors to purchase the roads in your community!

  • Comment number 64.

    NotaProphet # 63

    Well, if you did as you say, then you would quickly find that you wouldn't have many customers; in fact, you wouldn't have any at all! You would lose so much money so rapidly and be out of business so fast you would wonder why you invested in roads in the first place!

    You clearly don't have that entrepreneurial spirit, do you?

  • Comment number 65.

    NotaProphet # 63

    "...I would spend the bare minimum on road maintenance, hire the cheapest, most unskilled laborers from afar and avoid as much investment in quality control, training, equipment, safety as possible..."

    That is precisely what the government does. Think about it old fruit!

  • Comment number 66.

    #64 Kurt

    In he short to medium term that would not be true. There would be no alternative to his road - no matter what the state of repair. Just look at how traffic manages to survive roads in Africa or Eastern Europe. With his excess income he could then buy up the railays - despite all of the crashes and then the airlines too.

    There's always a flaw mate!!

  • Comment number 67.

    foredeckdave # 66

    There's always an alternative Dave, always. Isambard Kingdom Brunel did not look at the gorge and simply declare, "There is no alternative!" Henry Ford did not at the then production method of automobiles and say forlornly, "There is no alternative!" John D Rockefeller did not look at the "black stuff" seeping from the ground and think, "There is no alternative!"

    NotaProphet's (very apt) business enterprise will fail because he will accept what has passed before and precisely because he cannot conceive of any alternative for the future.

    I like you Dave - and I do not wish to sound patronizing - because your heart is in the right place. But I have to say again you are wrong my friend.

    ;)

  • Comment number 68.

    Notaprophet (63) has eloquently described for us all a simple example of Poweromics (see definition below), where a few people in a position of power manipulate proceedings for their own personal ends, and has pointed out very well that they will continue to do so until more people say no. There are very definitely alternatives, but more people will have to demand them, otherwise the system will not 'learn from it's mistakes', and those in 'power' will continue to create them (and profit from them).

    Poweromics = People use position and power for their own personal gain, based on poor moral values, self interest and greed.

    Do most people learn and take responsibility, or just have a quick winge and then go back to the latest reality TV programme? Would the bridge across the gorge have been built if the Government did not want it built and controlled all planning rules for bridges (note crossing this bridge is a charged for activity - it's just waiting for change when they start to charge £30/crossing ... like the M6 toll road eventually too)? If you're frustrated and interested in making a difference why not get involved in the development of alternatives:

    e.g. the complete opposite:

    Leanomics = People take responsibility for adding value and continuously improving the situation for others (e.g. customers, communities, overall environment), based upon fundamental values such as trust, honor, responsibility and respect.

    The internet is changing the rules and will transform everything, including 'politics' and 'economics'. Google's mantra is "Do no harm". The Leanomics mantra is "Do good". If you believe in fundamental values and the common good feel free to join me and get involved in its development.


    David Clift, a Future 500 leader

  • Comment number 69.

    my many american friends over the age of 65 are quite prepared to work, permanently or temporarily. Some at 75 are happily employed. If you had to pay your medical insurance co-pays, you would do the same.

    Likewise, here at a funeral, I came across a bunch of 70 and 80 year old mechanical engineers being offered more work than they wanted.

    Vitually no-one is old at 65 in our decent society

  • Comment number 70.

    No.67. LibertarianKurt

    Yes, but the road owner would use his wealth to buy out any competing technologies which happened to come along.

    The government would have to introduce and enforce anti-monopolies laws, to prevent the wealthy minority from keeping a stranglehold on the roads and competing forms of transport.....



  • Comment number 71.

    LibertarianKurt (#64) "You clearly don't have that entrepreneurial spirit, do you?"

    Hopefully not.

    Begone Satan! ;-)

  • Comment number 72.

    People use the M6 Toll because on the cost benefit analysis it comes out better, faster journey time + less likelyhood of speeding but cost of toll against M6 Free - slower journey time + increased likelyhood of speeding tickets.

    As the level of traffic decreases due to the economic slowdown then the cost benefit of using the M6 Toll is reduced, why pay 2 quid to drive on an empty motorway when you can do the same for free.

    If the downturn continues then at some point the M6 Toll will become uneconomic and the owners will either have to reduce the charges or more likely force the government to stop maintaining the M6 Free (even though we pay for that one as well)

    Private industry has only one motive - profit

    Public industry should have only one motive - public good




  • Comment number 73.

    MrTweedy # 70

    "Yes, but the road owner would use his wealth to buy out any competing technologies which happened to come along."

    Not on NotaProphet's business model/plan he wouldn't: he would have gone bust long ago!

    The illogical conclusion you draw from your statement quoted above is similar to Karl Marx's, in that the growing concentration/accumulation of capital in fewer and fewer hands would eventually result in one great big Super combine/Super corporation having accumulated the total wealth of the country. Such an entity would simply be unable to function economically in the same way as socialism (government ownership of all of the means of production) cannot function.

    JadedJean # 71

    I guess you weren't enamoured with Walter Block's idea of road privatisation then?

    Your thinking is quite the same as dear old Uncle Joe's, isn't it? Quote: "If we do not allow our people to have guns, then why should we allow them to have ideas? Ideas are more dangerous than guns."

    ;)

  • Comment number 74.

    LibertarianKurt (#73) "Your thinking is quite the same as dear old Uncle Joe's, isn't it? Quote: "If we do not allow our people to have guns, then why should we allow them to have ideas? Ideas are more dangerous than guns."

    They are indeed. Do you know why?

    What I subscribe to is very similar to one or two others here - be sure not to miss ~11 min in on the last one.

    They were not too popular with your gang either, but they changed what mattered. Those who didn't mark their words are essentially responsible for this, but, alas, 'one can't put old heads on young shoulders'.

  • Comment number 75.

    LibertarianKurt

    Whoever went bust from owning a monopoly in a necessity (in this case transport infrastructure)?

    I think it's your argument that is illogical. Have you ever been in business; or do you just read about it?

    Anyway, it's good to debate with you again, old fruit.

  • Comment number 76.

    #67

    Kurt,

    And I like you too - 'cor it's a love fest!!!!!

    I agree. An old professor of mine at Harvard once said over lunch "TINA (there is no alternative) is the worst woman you will ever meet! You may not like th alternatives but they exist and you ignore them at your peril"

  • Comment number 77.

    No.76. foredeckdave

    At the risk of attracting your opprobrium, I notice you've had a varied career, including:
    (i) Working for the European Commission
    (ii) Studied at Harvard
    (iii) Have a PhD in the "Unwritten works of Thomas Hardy"
    (iv) Were a bigwig at the Training Agency
    (v) Been Formula One World Champion
    (vi) Never afraid of Virginia Woolf

    You should be running the country, and not wasting your talents in these blogs....

  • Comment number 78.

    MrTweedy # 75

    "Whoever went bust from owning a monopoly in a necessity (in this case transport infrastructure)?"

    Yes, you are quite correct in the context that the government owns (monopolises) the transport infrastructure. It cannot go bust because the losses it incurs can always be made up by fleecing the poor old taxpayer again and again and again ad infinitum.

    It was good debating with you too, old chum!

    foredeckdave # 76

    Thanks Dave. Not sure about the "love fest"; let's just stick to liking one another.

    ;)

  • Comment number 79.

    MrTweedy,

    You are sure right about the varied career - there's more if you really want it?

    (i) Working for the European Commission - on a series of EU Directives
    (ii) Studied at Harvard - did my MBA there
    (iii) Have a PhD in the "Unwritten works of Thomas Hardy" - now that would be an interesting topic. However it was more mundane - corporate culture
    (iv) Were a bigwig at the Training Agency - No. Undertook a number of consultancy contracts for them.
    (v) Been Formula One World Champion - I wish
    (vi) Never afraid of Virginia Woolf - Who she?

    But you are quite safe now 'cause I am enjoying my retirement. As for running the country - no thanks - though I'm sure JJ would take-up the offer like a shot :)

  • Comment number 80.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 81.

    BobRocket (72) - I agree in the main about the M6 toll road, it's not a perfect example but it still makes the general point - it's a flawed scheme but it's owners, supported by their 'friends' in Government, are already trying hard to recoup their money from it and will have more 'surprises' in store for us in the future I'm sure (e.g. the way individual road charging will operate in that area in the future).

    As an aside, have you ever have noticed the deliberate (and yet apparently accepted) way all the signs are designed to mislead people about charges, and charge most people far more for using the road than the big bold figures suggest (the less visible, less bold and less obvious prices placed to the left are the actual peak-rate prices and far more than £2!). The fact that the road system was also allowed to be designed to naturally place everyone on the toll-road itself, unless you spot this and quickly get off, was clearly also done in agreement with Government. Their 'friends' in Government will undoubtedly help them further in the future too, and they will probably get more money through a 'buy back' in the future (using tax payers money as NoProphet explained very well).

    Did you know the Government have just admitted to having a deliberate policy of slowing traffic down (by using deliberately ineffective traffic light sequences) so they would gain lots more revenue from petrol tax too. At the same time they preached to us about saving the environment! Do you still believe the rhetoric about providing public good?

    "Public industry should have only one motive - public good" ... I agree, but 'should' is a key word here I'm afraid. From a 'value' perspective, public services systematically waste 60-80% of all the money they take from us ... and that level has been rising, not falling! .. and guess what, going back to the subject matter in hand, rather than change this they want to take even more tax from us and get us to work until we're 70.

    Everyone happy? Are most people unhappy enough to do something about it? I'm not sure yet. It needs to get much worse before they will. Poweromics and wasteful practices are everywhere and I'm afraid it will continue unabated until it is properly checked. Perhaps I'll will put more examples on my web site soon.

    David Clift, A Future 500 leader

  • Comment number 82.

    JadedJean # 74

    It is interesting that you subscribe to that pseudo-scientist's (Skinner) theory that individual human beings are no more than theoretical points, in fact, not individual beings at all, just arbitrary point-events in an endless string of events from time immemorial to eternity.

    I suppose you would also go along with what Karl Marx believed, namely, that, "The human essence is the true collectivity of man." And what he describes in his posthumously published book Grundrisse, "an organic whole (or body)."

    Why do you have such a low opinion of the human race that you want to subsume individuals into some seething, organic, collective conformity which, can be controlled by the state? No doubt you and others who think like you would love to be the deciding factors in bringing about this unholy state of affairs.

    Blue pyjamas for everyone, eh?

  • Comment number 83.

    LibertarianKurt (#82) "It is interesting that you subscribe to that pseudo-scientist's (Skinner) theory that individual human beings are no more than theoretical points, in fact, not individual beings at all, just arbitrary point-events in an endless string of events from time immemorial to eternity."

    Read this very carefully and take it as fact.

    Behaviour Analysis (also known as The Experimental and Applied Analysis of Behaviour) is not a theory. It's an empirical technology of behaviour which is as reliable as any other are of biological science. It is used in medical/pharmacological labs all over the world for that reason. It's also an effective technology for the shaping of human behaviour.

    Skinner was certainly no pseudo-scientist. Trust me.

  • Comment number 84.

    #83

    Behavioural Analysis

    Now let's come out of the lab into the real world. "It's also an effective technology for the shaping of human behaviour. " Maybe in certain very controlled environments but very very limited when employed in let's say the market place.

    There is no way that Behavioural Analysis can by itself regulate buying decisions, voting decisions, or even group interractions - just for an example.

    You are the one who demands that others be VERY careful with facts - now you do likewise!

  • Comment number 85.

    JadedJean # 83

    "It's also an effective technology for the shaping of human behaviour."

    Oh, yes, that's good, that's very good! That is a statement that all statists can take encouragement from. Uncle Joe (J.V. Stalin) would have been so proud of you. Well done JJ!

    Endex

  • Comment number 86.

  • Comment number 87.

    foredeckdave (#84) "There is no way that Behavioural Analysis can by itself regulate buying decisions, voting decisions, or even group interractions - just for an example."

    Really? Four things for you to think about.

    1) Behavioural Economics I've provided links to good reviews at the SEAB site in previous exchanges with FrankSz.

    2) See Kahneman's Nobel prize in economics. My focus is on Herrnstein (see the rest of what have have said in te context of 'g' and ETS), Chung, Rachlin etc (parameters of reinforcement ('value'), as I think Tversky and Kahneman essentially just translated this work in the 70s.

    3) The programming of computers to make trades/decsions should show that you that are technically wrong. The analysis of behaviour as an effective process was central to Turing's classic paper on effectivity.

    4) Where we can not get control over variables we can not rationally talk about what will/will not happen. That is a lesson you need to learn - it is not a licence for 'management PhDs' to pontificate/con like Mystic Meg/Marvin.

  • Comment number 88.

    14: you're joking, aren't you? If not, what cock-eyed voodoo economics is that based on? What's the relationship between the collapse of Lehmann brothers and levels of public spending?

    And if you cut my pay and that of people like me(yes, I work in the public sector) and my pension rights, you'll find the quality of people willing to work in the public sector will worsen. This is the deal: you work in the private sector (I assume), get lots of perks and have the opportunity to earn very large amounts of money, but you don't have job security. I work in the public sector, have job security and a favourable pension if I stay, and do a job I think is really worthwhile, but I forego a significant amount of real income over my lifetime because public sector pay, skill for skill, is a lot lower than that of the private sector. Your solution only works if you don't want a public sector at all, otherwise you finish up with one that's inefficient and demotivated. Is that what you want?

  • Comment number 89.

    LibertarianKurt (#85) Just have a look at the SEAB site for papers on the behaviour management of children.

    Then have a look at the rising numbers going into care, crime etc as a consequence of the disintegration of the nuclear family (a mini-state) and the continuing efforts to secularise Muslims (statists/family people). Finally, give some thought to the effect of anarchism on chronically low European TFRs and its consequences for pensions/retirement. Individualists, like spoiled kids. are wrecklessly self-centred/narcissistic. Hence their failure to grasp the scope of Behaviour Analysis and their penchant for magical/feminized mentalistic thinking (good for business)?

    Using silly images of conformity, black propaganda about Stalin, Hitler, Mao, Hussein, Ahmadinejad etc to scare people into free-market anarchism will just serve to reinforce the pernicious elements of our economy/social infrastructure which have recently been exposed.

  • Comment number 90.

    #87
    JJ

    Don't be a prat all of your life!

    If you can show me a large scale 'real life' experiment wherein the populations voting or purchasing decisions were controlled by Behavioural Analysis techniques ten I will post no more. Now there's an opportunity for you.

    As for using computers to make buy/sell decisions then experience has shown that when such automated systems fail (in terms of the actual result of their 'decisions') they are SHUT DOWN by uncontrolled, irrational, human beings - thank God!

    What we do not need is more psuedo-scientists like you talking in abstractions about the power of techniques that are unproven in the everyday world.

    I will accept that here have been some positive signs of behavioural techniques being successful in the management of disruptive children in schools and with autistic boys. However, there is no evidence yet that these mechanisms will or can be continued into adult life.

    To comment on your reply to Kurt for a moment. The comments about Hitler, Stalin and Moa are not "black propoganda" they are recorded FACT. their ability to 'make the trains run on time' is far outweighed by the pain, suffering and mayhem that they caused millions of people. Their history SHOULD scare people.

    The major reason for your desire to control is your own fear. It stems for a fear of life itself. You cannot control everything. In fact you cannot control very much including yourself (that's not a dig it is the same for everybody). Lift your eyes for a while. It's a wonderful beautiful world with endless joys and possibilities. Experience it, embrace it and pehaps some of your fear will be dissipated.

  • Comment number 91.

    foredeckdave (#90) You haven't got a clue, nor do you know the first thing about science. All you kow how to do is 'argue' and spin tales. That's whta you think it all comes down to, and you're wrong.

    "If you can show me a large scale 'real life' experiment wherein the populations voting or purchasing decisions were controlled by Behavioural Analysis techniques ten I will post no more. Now there's an opportunity for you."

    Are you suggesting that we abandon the laws of physics (or medicine) and rely on mystic meg if we can't accurately predict next months weather (or cure cancer)? That's how people like yourself 'reason' in order to persuade others to buy into your warlock like services.

    As to computers, what's going on in all those trading rooms? It's the programming of behaviours.

    "However, there is no evidence yet that these mechanisms will or can be continued into adult life."

    No, some people are incorrigible. We we have to lock some people up, or retire them. Sometimes we even have togo to war and kill people.

    "their ability to 'make the trains run on time' is far outweighed by the pain, suffering and mayhem that they caused millions of people. Their history SHOULD scare people."

    Are you so politically naive that you don't know that much of what's recorded as 'fact' often is propaganda? That's how it works. For example, were the allies responsible for most of the deaths you have seen pictures of, through saturation bombing of West Germany towards the end of the war? Was it that which produced typhus epidemics. Was this then used to denazify (neo-liberalize) Germany?

    The same basic techniques are used today to keep the free-market deregulated, i.e. fear of control by some alien nation - today it's Muslim 'Islamo-fascist' fundamentalists. Hence the creation of the 'teenager' in the 50s and the 'student radicalism/anti-establishmentism' of the 60s and 70s. It was all anti-statism, i.e. good for the free-market, and anti-command economy/statism.

  • Comment number 92.

    #91

    YOU know very little about life!

    "All you kow how to do is 'argue' and spin tales. That's whta you think it all comes down to, and you're wrong."

    At least I have the inteligence to formulate arguments whereas you abstract elements of science that fit your own warped perception of what life is all about and then DEMAND that you are right! It is you and not me that is deluded. Just re-read the rubbish that you have highlighted in the penultimate paragraph of your last post.

    You are dangerous JJ. Thank goodness that the danger is really only limited to yorself.

  • Comment number 93.

    foredeckdave (#90) "The major reason for your desire to control is your own fear."

    Yes. True I remind you.

    1. Crumbling economy and state.
    2. Dumbing down of education, skills and falling IQ (dysgenesis).
    3. Below replacement level fertility in EU (see pensions).
    4. Rising violent crime rate.
    5. Ruising unemployment.
    6. Differential fertilty fuelled by high female education

    In words and pictures. Here it's no diffferent.

    Why aren't you afraid? Might it be ignorance of the data? - You really do need to stop beng so smug!

  • Comment number 94.

    LIFE - BUT NOT AS WE KNOW IT

    foredeckdave (#92) "Just re-read the rubbish that you have highlighted in the penultimate paragraph of your last post."

    I don't need to. I wrote it. That's how internees died in the Western camps. They continued to do so after they were liberated by the British, in their thousands in Belsen. he Eastern camps were liberated by the Soviets. They furnished some very odd stuff for the IMT, so odd that the Western allies refused to use it. That didn't stop the silly attrocity rumours spreading after the war though. That was a bit before the Russians admitted that they'd done quite a lot of painstaking fabrication of evidence and false allegations over Katyn mind. What happened after WWII was a major allied political/economic campaign.

    You don't know the half of life, I can promise you that - just as I can that you don't know the first thing about pursuit of truth, or delusion and politics ;-(.

  • Comment number 95.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 96.

    Jadedjean at #15:
    It's three days ago but I've only just seen it. What's the evidence that the third sector is just another term for the private sector? It's the voluntary sector, and it's not for profit. It's underfunded and it certainly doesn't attract the attention of (for example) MBA dissertations, at least in my experience, but it is an important aspect of a great strength of British society, that we'll call for the sake of brevity 'the gift relationship'. Many other developed countries don't have this to the same degree. If you keep knocking it, you may lose it.

  • Comment number 97.

    verymuchso (#96) It's part of the salami breakdown of the state. Just look into how many 'Think Tanks' are now churning out no end of self-published reports as policy advise to government. There used to be a time when The Commission made all their past investigations public, now many have been removed. Look into The Fisher Family Trust and RM as an example.

    They pay themselves salaries too don't they? The proliferation and scope of 'charities' since 2006 is quite sickening if you keep your eye on the Public Sector.

  • Comment number 98.

    94/95

    Not smug at all, just not impressed with your abstracted data.

    As for your Belsen reference, it merely demonstrates just how far you have removed yourself from the truth. To say that you are a stranger to the truth is puting it mildly.

  • Comment number 99.

    RETIREMENT AND DEREGULATION

    foredeckdave (#08) "As for your Belsen reference, it merely demonstrates just how far you have removed yourself from the truth. To say that you are a stranger to the truth is puting it mildly."

    I suggest you look into it yourself, and as you do, in what appears to be a rather belated effort to encounter the harsh truths of life rather than the spin, nefarious rhetoric and propaganda which is atill peddled in pursuit of self-interst and neo-liberalism, ask yourself, to what end were the Western airforces saturation bombing Germany, if not to disrupt materiel supply and supply lines?

  • Comment number 100.

    #97 jadedJean: this has taken us a long way off the original topic, but it's worth pursuing in its own right. Your view of the voluntary sector is fundamentally different to mine. You seem to see it as a proliferation of self-appointed experts paying themselves big salaries on the back of government consultancies, presumably based in the main in that there London; I see it as a sector involved in providing social, health educational and environmental support at the local level, often given inadequate funds by local government to try to reach the people at the bottom of the pile that the statutory sector can't reach (for all sorts of interesting reasons). It relies a lot on private donations and ordinary people giving their free time, as well as on poorly paid staff who believe strongly in their work and wish it were better recognised.

    Both worlds exist. I don't think we know enough about either to say which has the greater impact, but to dismiss the local activity of often long-established charities because of the malevolent influence of think-tanks seems to me excessive.

 

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