EUROPE'S POOR RELATIONS?

EUROPE’S POOR RELATIONS?

CURRENTLY there are approximately ten million UK pensioners, but our basic state pension doesn’t bear much scrutiny when compared to the rest of Europe, or the rest of the Western world for that matter. In fact, when expressed as a percentage of a nation’s average earnings, we in the UK are paid one of the LOWEST state pensions in Europe.

Conversely, of the thirty-five nations across Europe, the United Kingdom sits at a perfectly respectable tenth in terms of its Gross Domestic Product (source: Infopedia.com). Also, according to the World Bank and the International Monetary Fund’s 2011 rankings, the UK is the twenty-second richest nation in the world (source: Wikipedia.org). However, where state pensions are concerned, we UK pensioners are close to the bottom of the pile.

So why are we so badly-off when compared to most of our European neighbours, and why are some of us being threatened with the loss of our bus passes, winter fuel allowances, TV licences and free eyesight testing?

Soft Target

In short, it all dates back to 1980 when Margaret Thatcher’s Conservative government decided that the UK basic state pension should be calculated against the prices index only, instead of a ‘whichever is the higher’ comparison between the prices index and the national average earnings, as had been the case up to then. Soon after this change was introduced, the prices index began falling behind the national average earnings index and it has continued to slide ever since. Today, our basic state pension is equivalent to approximately thirty per cent of the UK’s national average earnings, whereas the average EU state pension is around sixty per cent of earnings. (Source: OECD)

While PM David Cameron’s coalition government has undertaken a mammoth task in seeking-out ways to reduce costs across the board, we pensioners could argue that we’re being singled-out unfairly.  Indeed, in view of the above mentioned comparisons with our EU neighbours and the threats to our benefits alluded to earlier, one might even be forgiven for claiming that the powers-that-be are viewing UK pensioners as a soft target.

Community Work

Take, for example, the comments by Lord Birchard (a former head of the Benefits Agency) who, during a recent meeting of a committee investigating demographic changes and their impact on public services, put forward the suggestion that, if an incentive was promised, some pensioners might be able to carry-out community work.

His actual words were, “Are there ways in which we could use incentives to encourage older people – if not to be in full time work – to be making a contribution?  It is quite possible, for example, to envisage a world where civil society is making a greater contribution to the care of the very old, and older people who are not very old could be making a useful contribution to civil society in that respect, if they were given some incentive or some recognition for doing so.”

Excuse me? Older people who are not very old could be making a useful contribution? Surely we pensioners have contributed quite enough in National Insurance, plus income and other taxes, not mention sheer hard graft, over the past fifty years and more to entitle us to a meaningful return on our investment, without having to justify it? After all, the basic state pension is not a benefit. It’s an entitlement.

Regrettably, Lord Birchard is not alone in targeting UK pensioners. While Labour have remained uncharacteristically silent throughout, the Deputy Prime Minister Nick Clegg waded into the bus pass and winter fuel allowance issue in December, when he stated that the Liberal Democrats would “look again” at universal benefits: arguing that welfare payments “should not be paid to those who do not need them.” Similarly, the Work and Pensions Secretary Iain Duncan-Smith has signalled that the winter fuel allowance, TV licences, bus passes and free eye tests may be means tested after the next general election.

Divide and Rule

When considered together, the above statements seem to be saying wealthier pensioners should be stripped of these universal benefits by way of a means test. That must surely mean ALL pensioners will need to be means tested.  But who defines what the word “wealthier” means? And how much is it going to cost the government to conduct the means testing of every pensioner, merely to seek-out the comparatively few who, perhaps, have been fortunate enough to build-up a decent private pension, or put aside savings for their old age?

Whichever way you look at these issues, it becomes increasingly obvious that politicians of most persuasions are starting to wake-up to the fact that ten million or so UK pensioners represent a huge and potentially election winning, voting bloc. However, instead of wooing us, some very highly placed political figures are trying to drive a wedge between us and, in doing so, create a “them and us”… a “haves and have nots” … culture within the UK pensioner community. That’s what is called divide and rule, and we pensioners must make it clear to those who govern us that, far from being divided, we intend to stand united against any move to means test our basic state pension.

 

David Lowe (2013)

 

The above article was published in the Feb-March 2013 edition of the Torbay Times