Gavin Maclure's Musings

My take on politics locally, nationally and internationally

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It’s time to take away baby boomer benefits

"Let's go spend that winter fuel allowance, love!"

“Let’s go spend that winter fuel allowance, love!”

The doddering old age pensioner no longer exists. You know the one I mean: the elderly couple on the road sign or the elderly grandmother hobbling down to the post office with her pension book. Ok, a few are holding on but, sadly, most of them have now passed on.

elderley-people-road sign

A sign of the past?

The new generation of pensioners are – shock, horror – my parents! And believe me, this baby boomer generation are not your atypical decrepit old dears who shuffle around their houses with their coat on trying to keep the cold out. My parents will be trying to keep the cold out alright – but that is to be expected considering they are climbing to Mount Everest base camp later this month! You see: pensioners today are doing very well, thank you very much.

So why are we still giving them free bus passes, free TV licences and a winter fuel allowance? Many baby boomers are bringing in more money each month through their pension annuity than their children are taking home in their salary.

And that’s why it is right for the Coalition Government’s social mobility tsar Alan Milburn (of former Labour government fame) to state in his report today that growing numbers of elderly people could bankrupt the welfare state unless better-off pensioners are stripped of their free bus pass and other over-65 benefits. Why on earth does a baby boomer couple who get a new car every year need a bus pass?

Mr Milburn is also right when he is fearful of conflict between the generations when the penny eventually drops. When those in their 30s and 40s realise they have far less money than their parents had due to wage deflation and rising prices, the chances of a comfortable retirement will seem far fetched as they watch their parents head off on another Caribbean cruise.

You just need to look around to see where the money is. As soon as a run-down terraced house in my neighbourhood comes on the market, up shoots the silver haired 60-something bloke in the new BMW to snap it off the market – for cash. He then duly does it up and slots it on the rental market for a nice tidy sum a month to pay for his Val-d’Isère trips. And I’m sure his winter fuel allowance pays for the bar bill too.

Even Prince Charles has cottoned on. His Royal Highness is certainly at the upper-end of the baby boomer wealth-scale but at least he is being brave enough to feel the wrath of his fellow pensioners by calling out the problem. In a recorded piece he addressed the National Association of Pension Funds in Manchester today and told the industry to design pensions fit for “the 21st and not 19th century” or, due to the soaring older population, young working people today were going to be “consigned to an exceptionally miserable future”. The future King makes a very good point. Most people working today who are paying into a pension have a defined contribution scheme, which means they and their employer pay into a pot each month which gets invested in stocks and shares. The majority of baby boomers now retiring have a defined benefit pension, also known as a final salary scheme, where they receive a percentage of their final salary when they retire until they die. The final salary scheme is guaranteed, was not risked on a stock market, and is significantly greater in sum than defined contribution schemes.

The case is being made that paying billions of pounds in benefits to wealthy pensioners is amoral. Politicians have always sucked up to the over-60s as they vote but it is now time for them to lead rather than chase every last ballot paper. To keep kicking the can down the road is a very dangerous game. The masses are kept in check by having food in their bellies and somewhere warm to live. Once millions of people wake up to life’s basic elements being at risk in their old age, anything can happen.

As Alan Milburn writes in his report on baby boomer benefits, correcting the inequality in the benefits system will not be without pain, and neither will be re-designing pensions, but it has to be done if we are to ensure the children and grandchildren of the wealthiest generation in history (the baby boomers) do not end up in poverty once they can physically no longer work.

I know some of my baby boomer readers will say they put in so it is their right to take out now. Unfortunately, they didn’t put in half enough.



Teachers’ Out!

teachers strike oct 13

Hundreds of schools were affected by teachers’ strike today across the UK

Was your child’s education and future jeopardised today because your teachers fancied a day in bed or nice walk holding a placard or union banner?

Teachers in 49 local authorities went on strike today over pay, pensions and working conditions. Let’s break that down.

Pay: this actually refers to the Government giving MORE money to high performing teachers by introducing performance-related pay for the first time. I hope you weren’t sipping a cup of coffee when you read that. Yes, for the first time ever, teachers are going to be assessed on their actual ability to teach. Wake up and smell that coffee teachers: us mere mortals in the real world of work are constantly assessed on our performance with every appraisal having a direct impact on our pay. I would have thought teachers were first in line for performance assessment considering how their work affects hundreds of lives over the course of their career.

Pensions: Don’t worry, our teachers aren’t going to lose their gold-plated taxpayer funded pension pots which will see a teacher retire on at least £26,000 a year. They are just being asked to contribute a bit more to their pensions to alleviate the burden from the taxpayer. You see, there is no pot of money teachers pay into. Whilst teachers do contribute some money to their pension whilst they are working, the vast majority of the pension bill – even AFTER the reforms are brought in –  is paid for by today’s taxpayers, as is the case with ALL public pensions. It’s just as well we have had a baby boom recently – those children are going to be needed as soon as they can start paying tax to ensure our beloved teachers of today can retire at 60. Yep, if teachers started work before 2007, they still have a normal pension age of 60. Back in the private sector, I’ll be lucky to be 70 before I can retire. And may I remind teachers, again, final salary pension schemes CLOSED for the majority of private sector employees over ten years ago leaving us with derisory defined contribution pensions which will only return, on average, around £8,000 a year when we (eventually) retire.

Working conditions: You are having a laugh aren’t you? Twelve weeks holiday a year! Most in the private sector get half that if not less. And teachers are also complaining that the headteacher will be allowed to sit in their class to assess their performance at a time of his/her choosing. You mean like employees elsewhere have to put up from their boss every day of the week?

Give me strength!

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Coalition Government deems all parents unfit to feed their kids

All infants between 5 and 7 will now get free school meals

All infants between 5 and 7 will now get free school meals at a cost of £600m to the taxpayer

Yes, that’s right, Nanny has determined every parent in the country can no longer be trusted to feed little Johnny so the State will just have to do it herself. Oh, but you’re paying for it. If you pay taxes that is.

So we now have, thanks to Matron Clegg, the perverse policy of providing free meals to the sons and daughters of millionaires paid for out of the taxes of a 16 year-old earning the minimum wage stacking shelves at Tesco’s. That just about sums up this Coalition Conservative-Lib Dem Government doesn’t it? We’re on the side of hardworking people. Give me a break. You are taxing us until the pips squeak (hat-tip Denis Healy)! The deficit is already £120bn – it’s just about to get larger which will mean more higher taxes in the future to pay it off. Cheers Nick and Dave!

We now have a situation where people who decided to have children – no one forced them – are now receiving MORE money from taxpayers who do not have children. These same taxpayers are likely to be children of the baby boomer generation: they cannot afford to have children as they are taxed to the hilt in professional jobs which thirty years ago would have paid a handsome wage but now just about get the person from one end of the month to the other. And then we have the baby boomers themselves who have done very well – thank you – from being born at the right time in the right place and are sitting pretty on gold plated final salary pension schemes. But let’s not forget these same gold plated pensions are topped up with the taxes of their children who are compelled by law to pay their heating, TV licences and public transport costs.

I think I am entitled to be a little peeved…


UPDATE (1): The Lib Dem Deputy Leader is against free school meals for those who can afford them:

UPDATE (2): Boris has spoken – he’s against free school dinners where parents can afford them. The London Mayor told Guido: “I tell you, it would be very easy to say, I think.. I think that it’s real you know errr I, what I think is there should be compulsion to eat the school meal, but I am in no means against getting parents who can pay for to pay for it.” Hat-tip to Guido.