Why don’t Labour get it?

[MincePiesAndStilton]

Discussing with DH yesterday about the general state the country is in. Am I being daft, or is it not that hard to fix?

• Cut welfare spending. The country can’t afford it and the current system doesn’t promote independent living. Financial support for those who need it, practical support to get those who can work, doing so e.g. young people
• Get building. We are desperately in need of new infrastructure in this country. Bridges, roads, prisons, schools and hospitals to name but a few. Doing this creates jobs and economic stimulation, see point 1. Get building = get the economy moving.
• Invest in public services - stop playing the “fiscal rules” card and start making sure there are plenty of good quality jobs to tax people at a reasonable level at. See point 1 again. Things like oh I don’t know, the Police, Prisons and Border Force to keep the country safe and make it less attractive to those who want to come here and do harm. And before anyone jumps on me, no - I’m not anti immigrants, anti asylum seekers or anything else. Some people need our help. Some people want to come here and sexually assault women and children. Those two sets of people need treating very differently.

Instead, what we’re going to get is more tax rises, fewer services, more welfare and no progress on immigration. That will let Reform in through the back door and then we’re in real trouble.

What am I missing?

It's time lower and middle earners in the UK paid their fare share like similar people in other countries.

@Dorisbonson

The issue is housing costs though,

Nope. It’s a tax you pay when working. It’s not an investment.

They are not claiming a state benefit. They are getting a return on their investment (compulsory) in the state pension scheme. The state cannot make people pay in to a pension scheme then refuse to pay their full entitlement.

@Mischance & yet they have increased the qualifying age & changes things like inheriting a spouses state pension.

It is a BENEFIT & the vast majority will take out more than they put in.

They do get it but they are not here to serve the electorate. Lack of accountability and plum job on exit.

They are getting a return on their investment (compulsory) in the state pension scheme.

I agree that’s how it should work. What I can’t see the case for is our actual system, which pays out significantly more than was paid in, and then charging the difference to the current generation of workers.

Please bear in mind that pensioners are taxed on their total income from all sources so effectively many pensioners have their state pension wiped out by tax anyway.

which is a great position to be in!

What I can’t see the case for is our actual system, which pays out significantly more than was paid in, and then charging the difference to the current generation of workers.

particularly when that pool is shrinking

I agree with the OP that investment in infrastructure and services is the way forward and I am a bit disappointed that Labour have not grasped this and got on with it to the degree that I had hoped. But they are still better than the last lot!

Cutting welfare spending is a challenge and often people say it should be better targeted - but spending more on means-testing (and the staff costs involved) can cost more than it saves in outgoings.

Investment needs to focus on helping young people to get the properly targeted education, particularly in the latter years, that will open up job opportunities for them.

The “problem” with pensions is that state pensions are trying to do two things at once.

when they were set up the original idea was that they were self financing, so it was just like a private pension pot except that it was run by the government. You got out related to what you put in, just like with private pensions nowadays.

but pretty quickly they realised that it wasn’t going to be self funding and it’s needed subsidizing pretty much ever since.

so the problem is that people think they’ve “paid in” and have a pot of money they are entitled to but actually this is not the case. In addition, lots of people who have not paid in much or at all (because for example disability benefits give you qualifying years for state pension as does child benefit until your child is I think 12) also have entitlement.

so the state pension is a weird mix of people who genuinely have contributed a lot of money towards it and if it were a private pension would absolutely have an entitlement to it - and people who haven’t.

it makes reforms to it very difficult politically.

I did save. I paid my NI contributions. That was the social contract.
Do you now want to renege on that contract? Shame on you.

Sweeping generalisation though and covering a whole range age of people.

I am heading for retirement.
Single parent, due to an adulterous husband. Always worked full time. I have an unbroken contract from the 80’s.
Second hand clothing, second hand Santa, old fully paid for cars, limited holidays and scrimped and saved to buy my own house.
My young adult DC’s have moved out, one rents with little chance to buy, the other has bought in a very cheap area, not somewhere he really wants to live, but it is a start. I can't support them with house deposits.

Retirement is looking about manageable, that is all. I've tried to save my whole working life. My house is worth more than it was, but so are all of the houses around me. It would cost thousands to buy and sell.

Maybe different for an 80 year old pensioner, I'm not sure, but not the amazing picture for me as a ‘newer’ retiree than you suggest.

Do you now want to renege on that contract? Shame on you.

Where is the shame for breaking the social contract for the young?

Even if someone worked full time for decades they won't have paid enough for 2 decades of the state pension. you would need to have been a higher earner for decades and the vast majority aren't. That's before you even look at healthcare costs.

Other countries pensions are more aligned to what one has actually paid in so maybe we need to look at that.

I don't understand. Can you expand your point please.

@senua what do you not understand? We have broken the social contract for the young and I see little shame expressed about that.
I have paid my NI contributions too but that's hasn't stopped the qualifying age increasing or the fact it will be reformed when i'm older.

@senua or perhaps you could expand why young people should pay more for things they won't receive and if they complain about that why is it shameful?

What never seems to be brought up in the “bash the pensioners” argument is the £57bn p.a. that the very generous public sector pensions cost. These are index linked and public sector workers get them in addition to the state pension, paid for by the tax payer. This is causing a huge black hole in the finances which Government keeps strangely quiet about.

Having friends in both camps, my private sector friends earn far more than public sector friends. Often hear, “I got a bonus of £10,000 which I have moved straight to my pension pot, or “I've earned over the tax threshold so have removed part of my salary to my pension, to reduce my tax”.

public sector pensions are not as generous as they were of course, another ladder pulled up.

The indications are that we have reached the top of the Laffer curve where any increases in taxes fails to produce a gain in net revenue for the public purse and can produce less. 81% of new borrowing goes on servicing our growing debt and we have to borrow more and more to stand still. We have stagnant economic growth, a very weak private sector, a burgeoning bill for public services, one in four workers in the public sector an estimated 6.6 million people on benefits and a NHS which is simply unaffordable. We are living beyond our means. You can’t spend yourself out of a debt crisis and there is no single solution. It won’t be solved by cutting the triple lock, tackling benefits or excessive immigration on their own. Everyone will have to face the pain of an emergency budget sooner or later. Sorry to be a Cassandra but more and more economists like me are sounding alarm bells now.

@senua
I paid my NI contributions. That was the social contract.

The triple lock was introduced in 2011. When did you enter the workforce?

So many people incorrectly think the state pension is a social contract based savings type arrangement.
It is not.
It is a state given benefit.
The notion that someone worked and paid into a pension pot to recoup when they are of age is simply wrong - and reasonable to expect those who assert this to be able to prove it.
I understand the feeling that it is, or should be, such a scheme, but it isn’t.
As to people being “entitled” to a decent retirement- it’s the same sort of reasoning that goes with being entitled to a job, housing education but while great in theory - harder to achieve with only state support.
Labour could reform any part of the welfare system and (yes pensions fall under the welfare system and welfare bill!) people would insist they shouldn’t and that people are entitled to support for x,y and z.
they would be in a fair and efficient system but Labour can’t (or won’t) be able to “fix” the damage from 2008, COVID and Brexit in a few months or probably even a few years.
Nor will any successive government do so by just trying to shave portions of the welfare costs.
..Because people will resist any change to a welfare benefit that affects them. And as the state pension is the biggest cost - expect the greatest resistance to that particular benefit being changed.

What makes you so sure that you won't receive it?
I've heard people complain, in dejected terms but your generation's resignation and acceptance of the concept is doing 95% of the politicians' job for them. I haven't heard much fight for your rights.
Pensioners fought back (e.g. on WFA) so why don't you?

Immigration works well when it is highly selective and those who come into the country put more in than they take out.

We don't have a highly selective immigration system and additionally the tax system means that immigrants cost the government more than they pay in taxes (unless they earn over circa 65k a year depending on children/health).

This basically means most immigrants impose greater costs on the system.

On the immigration for the NHS/Care worker issue it is perfectly possible to issue time limited visas for workers who have zero dependents (where most of the cost is) and give them a small tax break for having zero dependents so they come to the UK work here for a few years and then return home. That way we buy some years to train more nurses and doctors and don't have to pay for dependents of immigrant workers.

@senua I'm not young, I'm middle aged but recognise it's worse for them then it is for me.

What makes you so sure that you won't receive it?

What do you mean by it? I know the age has increased.,,

haven't heard much fight for your rights.

So you agree with me? the social contract for the young is broken.