'Oh, so that's who Richard Morris is..." Lord Hattersley on The Daily Politics

'An influential activist' - The Guardian

'Iain Dale, without the self loathing' - Matthew Fox in The New Statesman

You are a tinker...' - Tim Farron

Friday, 1 July 2011

Can't Pay? Actually no. It's won't pay.

Like me, you may been labouring under the illusion for some time now that what lay behind the current passion for reform of Public Sector pensions was that the country simply couldn't afford them - especially given the fact that people are now expecting to live much longer and therefore draw on that pension for longer.

And if so, then again, like me you may be surprised to learn this isn't true. Remarks like David Cameron saying "The reason we can't go on as we are is because as the baby boomers retire – and thankfully live longer – the pension system is in danger of going broke", may have led you to that conclusion, but's not the case. This is ably demonstrated by this excellent analysis and interview by Evan Davis, and if you want proper details you could do worse than read this piece on False Economy (though be warned, it isn't exactly a cool, objective look at the issues - but it is very well researched).

If you don't want to read all that detail or listen to the interview, the summary soundbite is that public sector pensions will actually drop as a % of GDP over the next 30 years, even without any of the current reforms.

So, if the reforms are not driven by affordability, what are they driven by? The answer - allegedly - is 'fairness'. The argument goes that Public Sector pensions have been protected over recent years, private sector pensions have dropped dramatically, and as the private sector taxpayer funds the bulk of the public sector pension pot, this isn't fair.

Personally, I don't buy this argument. As a private sector worker, I'm quite happy to fund Public Sector pensions, even if my own pension pot is dwindling, partly because they are just plain worth it, and partly because that was the deal we did to get workers into the public sector in the first place. But I know others feel differently.

But whichever side you take, don't do it on the grounds that it's unaffordable ( or as it's now being described, untenable). Because it simply isn't true.


  1. Have you joined Labour yet? Because all you ever do is criticise this government and our role in it. There's a party for that. It's not the Lib Dems. False Economy is accurate in its name in that it's a bunch of made up economics that no serious economist would touch with a bargepole.

  2. Oh, I don't think that's very fair. I know I am pretty critical of the Tories on a fairly regular basis and I won't apologise for that, but that doesn't equate with criticising the government, and I think I've been pretty consistent. The piece above isn't actually a criticism of government policy either - it's a criticism of a false argument that's been put forward to defend the policy. Similarly, defending the right to strike doesn't make me pro Labour (you may have missed it but even Philip Hammond was supporting that on QT yesterday)

    I do criticise our tactics when we get them wrong, and if I think we're doing something that isn't Liberal - then I do say so. So if you're looking for slavish commitment to the party line, and blind acceptance of everything this government does, just because we form part (I'll say it again, part) of it, then this blog may not be for you.

    But then, to be able to hold a civilised debate amongst ourselves about our beliefs and values is one of the things that makes us better than the Tories or Labour Party - as I blogged about here...http://aviewfromhamcommon.blogspot.com/2011/06/is-answer-to-olly-grenders-question-lib.html

    I hope you'll stick with reading the blog tho - I think you'll find that it's very supportive of Lib Dem values generally and the party in particular.

    I hope you don't mind if I blog about your comment at some point in coming days - you make an excellent debating point. And please don't feel you have to stay anonymous.

  3. oh, one other thing. False Economy; yep, clearly a Labour supporting, left wing think tank with an agenda. I read lots of them. I also read and reference lots of Tory one's too. I learn a lot, they make me think, and help me work out our defence and point of view. Know your enemy, and all that.