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1016   17 June 2004  

Pensions 
TUC misses the point

I have been associated for the last ten years with the cause of fair pensions.  With Jack Jones, I organised the Pensions Day Marches during the 1990s, to Trafalgar Square, with the late Barbara Castle a regular firebrand speaker.

But my interest has always lain in finding a unitary framework, within which the old and the middle-aged can agree on the features of a fair pensions system.  Although I support the excellent National Pensioners' Convention (of Jack Jones' foundation) I cannot identify with their more narrowly focused concern with the plight of the present elderly generations.  I seek a wider settlement.

My dream remains that of achieving a broad consensus, among all the over-40s, that the role of the State is to deliver a reasonable, and affordable, long-stop guarantee against impoverishment in old age.  My earnest hope is that "my" Government, of "my" Party, is inching towards the adoption of such a formula.  This week's unconstructive and emotive response from the TUC has not helped that cause.

  • I want to see a pension of £160 per week per person, disregarding marital or household status, payable at the age of 70.

I do not suggest that everyone would be "required to work" right up to the age of 70 - although many, I believe, would choose to continue to work if the social and financial considerations were favourable.  The principal function of the £160 pw fall-back commitment would be to allay the fears of the middle-aged.  £8,000 pa (at current rates, and subject to indexation) would constitute a great reassurance to the worried 40-Somethings and 50-Somethings, and enable them to dispel anxiety from that quarter.

Our Sixties  What would in practice happen, during our "Sixties"?  Many would, I believe, focus their savings on supplementary pensions products: the private sector would be well-equipped to sell "anticipatory pension" packages - the right to receive the equivalent of the Old Age Pension, for one-year only, at the age of 69 - then for another year at 68/69, and so on.  The private sector has proved very poor at meeting the undefinable liabilities of a commitment-to-death: only the State can give that assurance, realistically.  But the City would be very good at formulating and selling anticipatory pension packages.  Employers keen to keep staff could offer such packages as an inducement.  For those who had not been able, by 65, to make any such savings provision at all, but who could not work or could not find work, the State benefit system would continue to offer support - as it does at the moment for the earlier years.

I can imagine a society, supported by a bedrock universal State commitment to a £160 pw pension, in which one of the primary savings objectives might become "saving for early retirement", with easily accessible products available in the market place to provide such finite, supplementary assurance.  Nobody would be required to "work until they dropped", as the State benefit system would continue to apply.  Those of us who enjoy our work could try to go on doing it - though no doubt also hedging our bets with some early-retirement savings...

  • My earnest hope is that the TUC will stop playing populist politics, and get down to some serious work on this subject.

What do you think?  Drop me a line

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1017  19 June 2004  

Progressive Dissociation
 My new idea for the EU

The EU needs radical innovation.  The present “Constitution” negotiations are old hat, out-of-date before the ink has dried. Our politicians are playing games with the model of the old-style federal state.   Indeed, the very idea of “passing laws” to be implemented, at the same time and in the same form, for 25 nation-states, is obsolete - it does not meet the requirements of this key international construct.  New creative thinking is needed.

It is absurd to think, as Winston Churchill thought, of a “United States of Europe”.  Not even the USA, with 200 years’ experience of operating such a system, can operate it smoothly...  The US politicians can make it work only by allowing great powers to accrue to the US Supreme Court, a device not open to the European politicians.

New constitutional solutions are needed.  It is the job of politicians to devise institutional forms which give expression to the views of their peoples - if “government by consent” is to thrive.  And the current wave of Euroscepticism – while I do not share it, and consider it to be ill-informed and unimaginative – is running very strongly indeed.  All parties, both of Right and Left, are affected by a real wave of atavistic nationalism.  And as politicians, we must consider carefully the scope for its accommodation.  We must consider the case for a “two-speed” (or three-speed, or four-speed) Europe. 

  • I gotta’n idea.  I have called it Progressive Dissociation.  

I suggest that there should be majority EU voting to determine all EU-wide “federal norms”, exactly as negotiated within this Constitutional round - indeed, it is impossible to imagine the EU without such rules.  But a Member State should be allowed, at any time, to file a “Declaration of Non-Compliance”, in respect of any EU-measure so adopted.  That would be unilateral discretion, and the EU would have no option but to adjust to that withdrawal. 

The other side of that coin would be that the EU, by qualified majority, would be entitled to expel any Member State whose record of non-compliance reached unacceptable proportions.  The EU would serve on the State a “Dissociation Notice", setting out its record of non-compliance.   A defaulting State would be given a period within which to rectify its position, effectively deciding whether or not to change course, or leave the Union.  It would be for that State to decide, as a matter of its own constitutional law, whether or not such a decision should be subject to a national referendum.

This may sound complex, and indeed it is.  But within a new community of 25 nation-states there is bound to be greater complexity.  And progressive dissociation would allow national governments to accommodate their own Eurosceptic components in their own way, against the possibility that they might become such impossible partners that the club would prefer to remove them.  It is clear that Euroscepticism represent a different ragbag of elements, varying radically from country to country.  A state faced with the ultimatum of an EU Dissociation Notice would be placed firmly in the Last Chance Saloon.   That State would be forced to decide - after all the blustering of nationalist protest - where, on balance, its national interest lay.

What do you think?  Drop me a line

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