I cannot hold back any longer from inputting to this debate about pensions and, as someone who has retired at what appears to be “the best time”, I hope I can be rational and subjective. I am also someone who is a part of the baby-boom generation of post-war growth in the population, so I have a view that includes this knowledge!
The baby-boom was encouraged by the post-war governments to help generate growth after the difficult post-war years of the late 1940s and has been “known about” by every government since then (both Conservative and Labour). There have been some major policy changes over the years that have been introduced to compensate for the effects of the baby-boomers coming through the system (one that springs to mind in my own area was the introduction of “New Lectureships” to boost University teaching capability during the 1970s). There were initiatives when I was school, such at the Nuffield teaching scheme, which may also have been a reaction to the baby-boomers!
What has this to do with pensions, I hear you ask? Well, the current government is claiming that part of the problem we now face, with what they say is an unafordable pension scheme for the public sector, is the increasing numbers of pensioners – us baby-boomers! BUT, I have to ask, why has no government faced up to this in the last 60 years? If any government, during that period, had increased NI contributions by 0.1% then there would never be a predicted short fall. But such a policy was never even discussed in public; although, it must have crossed the mind of some Chancellors along the way – surely?
However, the situation is more complex than our current coalition mess (sorry, government) would have you believe. For a start all the public sector pension schemes are in the black (even the University Superannuation Scheme, which changed its rules recently to ensure this) and not, as the government would have you believe, running into a debt crisis. Therefore, to talk of such short falls is totally wrong. The predicted short falls are more about the impact of a weak Stock Market than they are the reality of the situation. The government seems bent on using inflammatory statements such as describing the strikes as “futile” and statements suggesting negotiations where happening when, before the strike, there had been no such negotiations since November 2nd. A more sensible position would be to encourage more public sector workers to contribute to a pension scheme, especially the young who would benefit most, which would increase input and keep the system solvent for many years.
Then, I notice the media has bent their coverage so that this appears as a dispute between the teachers unions and the government; whereas, in reality teachers represent a minority of public sector workers who are much better paid than the vast majority. The major employer is the NHS and many of these workers are the lowest paid of all public sector employees. Their main desire is to secure their future with a reasonable pension (although this pension will always be limited by their already low salaries). The fact that the government wants to delay and reduce their pension is immoral and not striking as the government and the press suggest!
My view is simple – this is a problem created by weak governments, over a protracted period, and any current government must carry the debt of what previous governments have failed to do.