I never thought I would find myself in agreement with David Blunkett, but he has made some good points in his latest speech to the Counsel and Care charity in London. I accept I haven't read the whole speech so I may be missing some of the nuances, but here goes anyway.
Older people should be prepared to work after they reach retirement age for as long as they are physically able to, former cabinet minister David Blunkett said today.As a socialist he confuses Government with tax payer, but we'll ignore that one.
Blunkett said that as the number of older Britons continues to rise, it was wrong to assume that the government should have "prime responsibility" for elderly care.
For years Maggie banged on about this problem but it was ignored. When the welfare state started there was over 10 workers to every pensioner ** and it is fast approaching 2:1 and will be 3:2 by 2040 according to some estimates. This is clearly unsustainable and its a pity that Blunkett had his head in the sand when he was in office.
The main problem is that we have a pay as you go scheme which a large part of the population doesn't appear to understand and think their NI contributions are paid in to some kind of fund they can draw down. Furthermore we are living longer and starting our working lives later, and with the debt of funding university courses. This means that people aren't being given the opportunity, let alone the will, to save enough for a long retirement.
So something has to give, but he misses the point. Only those who haven't saved enough during their lifetime should be prepared to carry on working until they meet incapacity or the grave. Or turning that round you have a choice - don't save and keep enjoying yourself with expensive cars and holidays but be prepared to keep working until you die or save now, relax later; its your choice.
But this implies a grown up conversation between the Government and the Governed and we don't have any major politicians prepared to have that discussion, what with the Tories trying to outdo Labour in the socialism stakes. And as we know, socialists don't trust the proles anyway.
"In our endeavour to protect people's inheritance, have we not made enough of, and are we not clear enough about, the release of equity from the enormous home ownership that exists in Britain and the divide of those with and without assets which this trend has accelerated?" he said.Harsh as it seems it is not the job of the tax payer to protect Middle England's inheritance. If you have capital in your old age then you should be obliged to use it for your own care or continue working. Yes I know its harsh, some people get to live a long time and use up all their savings (so their children miss out on free money), others die yong and leave their savings to their family, life isn't fair; but its a damn site fairer than a 3rd party protecting the inheritance of those whose parents have money but don't want to pay for their care.
Again, this needs another grown up conversation and a few truth's spelled out, but I suppose that won't win elections so again probably won't happen.
Finally we have the real clincher. It has finally dawned on him that the welfare state creates a moral hazard, and what's more the cost of that moral hazard is becoming unsustainable
"Why should someone who's not saved, who's not put money by, expect those who have to sustain them to do so not just in working life but in retirement as well."A very good question and one some of us have been asking for years. Lets hope that this message sinks in and come the next GE we have politicians with the metaphorical balls to stand up and say what the real problem is - we pay ourselves too much, for doing too little for not long enough.
Ah, I here you say, but what about people can't even make ends meet, let alone save for retirement.
Yes, there a number of people for who have been dealt a bad hand and these are the ones we need to protect - maybe a partner has died and they have a young family, maybe they suffer a chronic illness or have disabilities or they have suffered the slings and arrows of outrageous fortune; these we should protect. But there are far too many people who think that they can go through life not caring about the decisions they make and expect the rest of us to pick up the pieces.
**I couldn't find the exact figure but in this paper the Minister of State for Pensions states "When the State Pension was introduced in 1948 the ratio of working age people to pensioners was 5–1." Given that women weren't generally working and that not every man of working age was employed - many were disabled from the war so I have just doubled the ratio. I reckon this is too low and seem to remember reading somewhere that the ration was nearer 12:1