Thursday, 25 October 2012

Dangerous precedents

According to his Wikipedia entry, Lord Bichard spent most of his working life in the public sector.  During that time, he no doubt contributed to various public sector pension schemes, and now enjoys the benefits of those schemes.  I wonder how he’d feel if the managers of those schemes suggested that he should lose part of his pension if he refused to volunteer for unpaid work?

That doesn’t seem to me to be very different from what he has suggested should happen to state pensioners.  It might be argued that the state pension scheme has never been actuarially sound, and that the contributions made have never been enough to support the level of benefits promised to pensioners.  That would be true; but those in receipt of, or expecting to receive, state pensions are hardly to blame for the fact that those managing their pensions promised them certain benefits and never took enough money from either the employees or the employers to pay for them.
From the pensioners’ point of view, the two situations are very similar – they paid in what they were told to pay in, and were promised certain benefits in return.  What his lordship seems to be proposing in the case of the state pension is to breach the contract to which those paying their NI contributions over 40-50 years thought they had agreed.
His choice of words is interesting as well.  He refers to being able to “use incentives to encourage older people, if not to be in full time work, to be making a contribution”; but his proposal to reduce the level of pension paid for those who don't sounds a lot more like a penalty for not ‘volunteering’ than an incentive to do so.  The carrot looks more like a stick to me.
His comparison with the question of student fees is another notable aspect.  As the BBC put it: ‘He acknowledged it would be difficult for politicians to sell to the public, but added: "So was tuition fees."  It seemed a fair point to me – and a lesson which we should learn.
No matter how unacceptable many of may feel his latest proposal to be, the parallel with tuition fees is instructive.  All four parties in Wales opposed tuition fees at some point or another – but eventually, the majority of elected members in all four were persuaded or cajoled into voting for that which they had previously opposed.  To an extent at least, this was as a result of civil servants (such as Lord Bichard?) telling them that they had no alternative.  But by caving in so easily, they have moved the political centre of gravity to the right, and created a climate where people like Bichard can use their U-turn on one 'difficult' issue as a precedent for further movement in the same direction.
Those who said one thing in opposition and did the opposite in government have a lot to answer for.


Pads said...

How do we get from here to there? One step at a time.

Once students were asked to make a "contribution" to the cost of their education, it was inevitable that contribution would increase, and could easily drift up to paying the full cost. It just happened more quickly than I expected.

Does Lord Bichard volunteer in the House of Lords or are we paying him on top of his generous pension? It is estimated that former permanent secretaries can expect £100,000 a year.

It's shocking how detached people in authority are from the realities of life for the population. He's not even aware of the concept of paying your stamps.

John Dixon said...


I agree - once the first step is taken, subsequent steps become much easier.

G Horton-Jones said...

My mate Dai Twp tells me that Michael George Bichard has today been offered the job as trolley boy 11 hours per week spread over four days different shifts each day at a supermarket just off the Heads of the Valleys. minimum wage applies minus any staff discount you may aquire Wet weather gear is provided but only on days when the rain is horizontal

Seriously though.

Pensioners represent an enormous reservoir of skills and man power does not our dearly beloved Dyfed Powys police donate £3 Million to "retired" officers
And by the same token does not the same apply to all in receipt of benefit ie we are paying them not to work.

John Dixon said...

I'm not sure that the original idea was to 'pay people not to work'; it was more about ensuring a decent life for those unable to work, for whom work was not available, or who had come to the end of their defined working life and deserved retirement. That was the essence of the system at the outset.

Having said that, if paid work is in short supply (and expecting 'volunteers' to do work will only exacerbate that problem), then it could be argued that 'paying people not to work' is a price we have to pay to ensure work for the rest. It's a way of sharing the income from what jobs are available. Personally, if the mismatch between the supply of labour and the demand for it is a long term problem (rather than the short term one which most politicians are implicitly assuming), I'd prefer to share the work.

But pensions are in a slightly different category here. It was never really intended to be the case that pensions were either based on an inability to work or on paying a section of the workforce not to work; the intention was that people had 'earned' a right to retire after 40-50 years' work. The fact that the state pension was never put on a sound enough basis to make that affordable isn't the fault of the pensioners.