Old Age Pensions
A suitable case for socialism

Labour’s long-awaited “pensions judgment” has been made by the hapless Andrew Smith, with the publication of the new Green Paper.  And it was another dog’s dinner.  Yet another opportunity was lost to deploy straightforward socialist reasoning, to solve a deepening political problem.

I make a simple value judgment.  I assert that society should assure, to each tax-paying citizen, as of right, a satisfactory income in old age, reflecting at all times a fair share of society’s resources.

The evasions do not end there.  The linking of the state pension to average wage-levels earnings, says Andrew Smith, “would not be sustainable in the long-term.”  How can such an assertion possibly be made?  At what level is the assertion pitched – at the present 14% of average wage, or 30%, or 50%?  If our citizens, presented with the facts, were to decide that they wanted their collective affairs to be so arranged, why should that not be done?  Do we not have the power to determine the configuration of our own society? Why are the costs of a socialist solution not explained, rather than simply dismissed?  Are we not capable of making up our minds?  Why should the provision of an adequate old age state pension not be treated as a political priority, taking its place if necessary above other claims upon the public purse?  

This is another dark moment for Labour, as the retreat from socialism continues. We are sleep-walking, muddling through, for the sake of avoiding electoral unpopularity.  I say that a living pension should be assured to every citizen by the State, as a matter of entitlement – not by way of means-testing.  It should reflect a full contributory record, and should be abated by unauthorised omissions.  

This is the assurance which “society” should be giving to its middle-aged citizens, as they wrestle with the growing uncertainties of the global economy.  Pensions should be redistributive, and funded from taxation or other system of compulsory contribution.  For the irreducible basic pension (say, at 30% if the national average wage, or currently £130 p.w.), no systemic reliance should be placed on market mechanisms.  Above that level, there would be ample room for discretionary personal provision, in the market-place.  And I accept that the State promise should not kick-in until 70. 

This is, quintessentially, State business.  No other institutions of society have the long-term credibility to build and maintain public confidence.  This is political territory in which socialists have all the natural advantages, whereas the Tories are floundering.  For Labour, this represents the most important opportunity, since the NHS in 1947, for the entrenchment of a practical, universal, socialist principle, and one which would command overwhelming public support.