Archive for the ‘Blue Sky Thinking’ Category

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Pensions again

September 28, 2017

Goodness me but people feel strongly about pensions! I’m one of the WASPI women (by which I mean I’m one of the women to have my pension age raised – twice – and not that I’m anything to do with the actual WASPI campaign) and I’m professionally interested in the intersection between tax, benefits and pensions. In my other life I’m also a science fiction fan, interested in how the world will be organised in the future, and as a result I’m interested in the campaign for a Basic Income

So let’s unpack this a little.

First of all, I’m in favour of pension equality: men and women should be eligible for their pensions at the same age. I’ve believed that all my life but – as a feminist all my life – it’s been one of those rare things where men and not women were disadvantaged, and frankly it wasn’t high on my list of issues. But I had always expected that one day the pension age would be equalised – but great flying spaghetti monster, I’d always expected the result would be that men retired at 60, not that women retired at 65! So, although the WASPI campaign isn’t asking for the retirement age to be restored to 60, I bloody well am.

Sixty? Well of course! Over the next twenty years don’t you think your job is going to disappear? Whether or not you believe in the singularity, the machines are coming, coming for your job, whether it’s manual, clerical, professional, technical. We are just plain going to need fewer people.

So unless you want some kind of Kingsman-style solution, where we kill off nine-tenths of the population, what are the rest of us to do?

Everything! As Philip Larkin commented, “Why should I let the toad work squat on my life?” Do we live to work, or work to live? What happens if you free up the human population from the requirement to spend thirty-seven hours a week doing something they almost certainly hate?

I see two categories of possibility. In one, we have a few millionaires and billionaires in gated enclosures and private islands, serviced by a few paid bodyguards and other servants, and a mass of the populace reduced to eating the rats or each other, or to some sort of feudal serfdom. The dystopian future.

In the other, we go, no, actually I’m not willing to sit next to someone who’s starving to death while I’m getting fat. We give everyone some kind of basic income that’s sufficient to stop them starving to death and the rest is up to them. The utopian future.

Before you heap scorn on the utopian future, just think about it for a moment. Pensioners are already there, and what do they do? They have enough money to live, but does that mean they just sit drooling in front of Bargain Hunt and Countdown all day? Some do, sure: but some look after their grandkids and their own aged parents, some volunteer in hospitals and schools, some have jobs, run businesses, write books, paint pictures, learn a musical instrument, take tai chi classes…

What if we gave everybody a pension? You don’t have to sign on if you’re unemployed, because you won’t starve. You don’t have to work in order to eat and have a roof over your head, but you do if you want to go on holiday or buy a new coat. Let’s give everyone ten grand a year, and pay for it by abolishing the tax free allowance and taxing everything everyone earns.

Slight detour here on the subject of “paying for it“. When the post-war Attlee government introduced the welfare state, when the NHS was introduced in 1948, when we have a war to fight or a bunch of banks to save before the cash machines get switched off… how do we “pay for it” then? A government’s budget isn’t like a household budget. The National Debt isn’t like a credit card debt. Maybe we can’t give everyone a million quid and a pony without ending up with hyper-inflation that makes the million quid worth less than the price of a cuppa. But there are respectable economists who know a lot more about this stuff than I do who think it would be perfectly reasonable for governments to print a bit more money, and that public spending doesn’t drive out private spending but … fertilise it. If we should do it then we should do it, and the paying for it bit we’ll worry about later.

Apparently the people who study Basic Income as a serious policy option worry about the cadasterability of the proposal – how do you identify the people who are entitled to the income, how do you make sure they are citizens of, or residents in, the state paying the income, how do you make sure they aren’t claiming it twice?

Here’s an idea. Start with the pensions. Year one, reduce the pension age to 60 for everyone, and pay it to those people whose NI contribution record supports it. Year two, reduce the pension age to 58. Keep doing that till you get to zero (of course you’d pay it to children, although you’d also make it a criminal offence not to spend it on the children, and the children or a lawyer acting on their behalf could sue parents or guardians)

But let’s leave aside the utopian future and think about the WASPI campaign right now, and about the objection that there’s no point in paying pensions or compensation to everyone affected and any transitional payments should be means tested.

Just, no. Means testing is inefficient, expensive, and produces a second class, second rate outcome. It misses people who can’t deal with applying for it, and it puts stress on everyone who has to go cap in metaphorical hand for something that ought to be a right.  It’s a lady bountiful solution – “I don’t need it, but here, fill this form in, little person, and I’ll see if you qualify.”

Just give it everyone. And then get it back from the people who don’t need it, via the tax system.