Jo Grady, Lecturer in Human Resource Management and Industrial Relations at the School, responds to George Osbourne’s Autumn Statement, particularly on its proposal to increase the retirement age to 70.
Speaking on LBC 97.3 today (December 5th, 2013), in defence of the coalition government’s decision to increase the retirement age to 70, Deputy Prime Minister Nick Clegg argued “the point at which you retire is being shifted as people become more affluent and live longer”.On what basis, we should all ask, was Clegg making such a claim?
Today’s excellent Guardian editorial, for example, reports that median income in working households has“fallen a massive 6.4% since 2008”, while figures provided by the House of Commons Library in August of this year reveal that the UK is 4th bottom in Europe with respect to real wages. Recent reports provided by the Office for National Statistics (ONS) have also underlined the rising cost of living and the subsequent fall in living standards since the Chancellor George Osbourne’s first budget in 2010, while the Social Mobility and Child Poverty Commission solemnly suggests that “today’s middle-class children are on track to be the first in more than a century to be materially less well off in adulthood than their parents”. All of this is set against the backdrop of increasing unemployment for those aged 16-24, which, according to the House of Commons Library, was 21.0% in November 2013. The evidence for Clegg’s claim seems to be somewhat lacking.
It is only when we understand Clegg’s statement as an ideological gesture, rather than as an empirically verifiable one, that it starts to make a little more sense. In so doing we should recognise that pension concerns have always been subject to the ideological conditions prevalent within a particular period. In this regard, today’s Guardian editorial also reminds us that Lloyd George, who introduced the first state pension back in 1905, did so in the spirit of liberal benevolence. This was improved upon to varying degrees until 1942, when the progressive spirit of social reform was expressed within Lord Beveridge’s proposal for a comprehensive state pension. The post-war Labour government went on to cherry-pick various aspects of the Beveridge Report, leaving us, if you’ll pardon the pun, with something of a diluted Beveridge. The state provision was then subsequently bickered over until the post-war consensus fell apart during the late 1970s/early 1980s, after which the neoliberal consensus regarding the status of the state pension came to prominence.
So, although often presented as a new and pressing concern, the affordability of pensions, coupled with an increase in life expectancy, have long been hallmarks of pension debates. Such concerns can actually be traced back at least as far as the 1601 enactment of the Poor Law. Many of the arguments originally levelled against Beveridge have been simply echoed throughout today’s House of Commons, as well as the wider news media.
Case in point: Sky News today reported a government source saying that the new retirement age “is part of the government’s long-term plan to secure a responsible recovery”. The Chancellor added that the change “will help make sure the country can offer people decent pensions in their old age in a way that with increasing life expectancy the country can also afford.” This is ideology, plain and simple. Today’s gesture isn’t straightforwardly a question of affordability: it is a political decision, just like the granting of tax breaks to Vodafone or the spending of public money on Trident. Equally so, today’s decision isn’t made in pursuit of a responsible recovery since the truly responsible thing to pursue would be sustainable jobs within sustainable communities for the sake of a sustainable economy.
Delaying retirement and prolonging working will not provide a long term solution to this ongoing crisis. Nor will telling people that saving for an income in retirement is their personal responsibility, something which the state cannot and will not help them with. Ideology, by its very nature, can be divisive. We shouldn’t allow ourselves to be fooled about what today’s announcement really means.