Wednesday, 24 October 2012

Former benefits chief: the old are "a negative burden on the state"

Fascinating. Apparently Lord Birchard, who is a member of a committee investigating demographic changes and their impact on public services, has voiced the opinion that the elderly should be 'incentivised' to make a bigger contribution to society - such as by losing some of their pension.

He asks, "Are we using all of the incentives at our disposal to encourage older people not just to be a negative burden on the state but actually be a positive part of society?" And as they say, this is clearly a question expecting the answer "No".

Meanwhile, Professor James Sefton, a former adviser to the Treasury, has told the same committee that young people were effectively subsidising the older generation and should protest:

"I think they should be angry. I think the deal they are getting is poor," he said.

A couple of weeks ago, of course, I was saying the same thing myself ("Let the pensioners pay).

"Pensioners," I said, "aren’t, after all, the ‘real poor’ — we’re not talking about single mums on housing estates, or people on benefits, are we?"

The only thing is (though this seemed to escape some of my readers), I was being 'tongue in cheek'. Lord Birchard and Prof Sefton are, as far as I can tell, serious.

Now factor in the forthcoming sweeping changes to our laws on euthanasia (no, they're not before Parliament yet, but believe me, they're coming) and you have a truly 'toxic' mixture.

Anyone who has any acquaintance with the elderly will know that the more frail they become the more troubled they are by the fear and embarrassment of being a 'burden' and how important it is to reassure them that they are not, even whilst caring for them may indeed be 'burdensome'.

Yet what Lord Birchard's comments do is introduce the language of 'burden'  into our discourse about age, and Prof Sefton introduces envy into the relationship between the elderly and the young.

In understanding the nature of cultural change, the important thing to watch is the cultural 'change makers' - the places where attitudes are formed and the individuals who form them. If Birchard and Sefton are anything to go by, there are some deeply disturbing changes on the way.

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  1. Quotable quote from Richard Baxter in this context:

    "Many of the old philosophers thought that when sickness or age had made one unserviceable to the commonwealth, it was a shame to live, and a duty to make away themselves, as being but unprofitable burdens to the world. Christians are not of their mind, because it is a mercy even under pain to have time of preparation for another world, and because we may serve God in patience, and heavenly desires, and hope, when we cannot serve him by an active life.”


  2. "negative burden" - is that a double negative or a "negative of emphasis"?

    The old continue to play a valuable part in society. If they all staid at home, I wonder how many churches would close. If we are talking about the "sick and infirm", they have already made their contributions to the NHS. If you allow government policy to be governed by economics, you ignore that which does not have a monetary value.

    It has been said that the only two things that are certain in life are death and taxes. The young need to be reminded that they too will get old.

    West Yorkshire

  3. What annoys me is that the old often hate (no it is not too strong a word) our big family of 7 children.

    They enjoyed good material wealth. Often they have money in he bank, but from their prospective it is our family that should be grateful for them parting with some of their money in taxes to educate our children. A rough calaculation is that Child benefit, schooling, medical etc cost the state £250K max for our 7 children. Tax revenues over the next 40 years without inflaction are likely to be in the order of 5.5 million. Let us say that it is half that for whatever reason. That is still a return of 10 times on the state's investment. This is just working on average salaries, of course it could be even higher.

    The root of the problem of old age is greed. Are we surprised? Any Bible passage spring to mind?

    We don't treat the old with respect because in the main they knew better than God in determining their family size and so have noone to look after them. They die in room full of old people.


    1. What a sad picture you paint, Phil. The retired have made their contribution to society whilst they were working and many continue to do so, in a voluntary capacity, in retirement. Only yesterday I was asked to supply a reference to a retired person who is volunteering in a home for folk with senile dementia. I don't "hate" your big family although I am of the opinion that parents should have it in mind that they can support their families financially. As to your last statement "we don't treat the old with respect..............full of old people" just bear in mind that you too,will one day, be old.

    2. I wouldn't quite put it the way Phil did.

      BUT, when were these old people born? Old people now, are different to the ones I remember when I was at school who fought 2 world wars... & reminded us. They endured sacrifice for us & earned respect. I do find lots of the new old people (so to speak) pretty rude. These are also the people who fundamentally shaped the society we live in AND it's problems. What they complain about in the subsequent generations is pretty much a reflection of themselves.

      BUT, I am pretty concerned along with John. Old people have innate dignity along with everyone else. They may well have to make sacrifices to help us get out of this mess. But so do others.

    3. Mervyn,
      I agree people shouldn't expect others to pay for their kids. But in past generations we had less, but bigger families. Smaller families, or opting out of families does have an impact when you grow old (as seen in Russia and elsewhere).

      Of course, I haven't helped... we have 1 child. Some have none, who didn't plan things that way. But, when society view children as a problem, it wouldn't be long before they view the elderly as a problem

      Darren Moore

    4. This comment has been removed by the author.

    5. Those now retiring were probably born in WWII. They were brought up with the attitude of respect Darren refers to. Now there turn has come, it is not surprising they hope for the same treatment.

      West Yorkshire

  4. There are a few remarks that could be made.

    1. Lord Birchard's comments are dire. Please come up with a positive view of what the older generation can contribute. Please tell employers and the rest of society that they are under a moral obligation to enable the elderly to do so, rather than assuming dismissively that they're "past it". Finally, give older citizens positive reasons to remain active in society. To take a stick and beat people over the head with it as a default option is disgraceful and objectionable.

    2. Put differently, the idea that the best thing we can do with our final 20 years is to play while we slowly fall apart strikes me as a very impoverished view of the autumn of life. I'm happy to say that most older people I know don't subscribe to this idea at all. Faintly insulting, then, that it is insinuated that they do.

    3. The pension system is fundamentally flawed and for all their sense of entitlement, the current generation of pensioners simply haven't paid their way. The pension system was initially set up, by and large, under the assumption that cash would flow from the employed to the pensioners. That seems like a great idea only for as long as the working population grows faster than the retired: and guess what... the reverse is true. You can't ask young people to pay for pensions that they don't stand a ghost of a chance of enjoying in their turn.

    4. Quantitative easing is effectively a way to levy a massive tax on savings and using it to reduce the debts of banks, government and individuals. The biblical response to this underhanded tax is: "Go to the ant, O sluggard; consider her ways, and be wise."

  5. Yep,

    The problem is that EVERYBODY wants too much for too little and it can't be done. Having had what might be perceived as a go at older people earlier, let me even it up at younger people.

    Think about students. When I went, early '90s, I lived in a little cell, basically, & we shopped in Oxfam. The idea was do a degree, be poor, then reap the rewards when you go for a graduate job. I was told I had it easy, as few of us shared rooms. Now students wear designer clothes, have mobiles, cars etc. Of course you can live like that... if you have a job.

    Similarly, I remember at primary school, my Dad had a pretty good job, but we couldn't afford 2 cars or foriegn holidays. As the country generally got wealthier, prices on luxury things came down, we could. BUT, people think that these things are their right, regardless of their income. Hence massive debts.

    I hear people say how hard it is to make ends meet, when they have 2 nice cars, every latest gadets and 2 foreign holidays. Even on benefits, they're not just for survival, people have what I would have called in the 70s & 80s, luxuary.

    I do have some sympathy for pensioners. They feel that they've paid their pensions, and now being told that they haven't put enough in. But the maths shows that they haven't. Not because they've scammed the system. But because people live for much longer.

    Wasn't retirement (for men at least), the idea that you stopped working at 65, got your affairs in order, then died at 70. Many didn't get that far! Given we all live so long now, means retirement isn't about a 20 year holiday. People are far more able to work for longer. It's the only way the sums will add up.

    I say that as someone who will one day have to face that!

  6. Father Mervyn Jennings24 October 2012 19:27

    "I don't "hate" your big family although I am of the opinion that parents should have it in mind that they can support their families financially."

    Most parents would and could pay for their kids but the state hates this idea and so arranges it otherwise (making it almost impossible)

    From the post above, we got 250K back in benefits but will in our working life have paid roughly 600K in tax (I forgot that point)My kids will pay 5 million in taxes

    Who is paying who here?

    I am fortunate that I can "pay" my wife so we can use her tax allowance. Other parents are not so fortunate so the children go to day orphanages while she goes to work for a pittance which is only worthwhile because the 10k she earns is tax free and her allowance is not transferable.

    I am happy to support my family financially. What I object to is supporting the state. We have gone way beyond giving a few coins to Caesar.

    To finish the rant....I am annoyed at the 50s and 60s generation building an upside-down world which is anti-family, anti- work and extremely anti-Christian. By and large the Anglican Church has been complicit.

    I look forward to laughing when all the Church leaders give an account of their actions to God. Somehow I don’t think he will be laughing or in a forgiving mood. Try arguing to God that your global warming sermons were good enough when you were silent about the murder of his children… Try arguing to God that your “family services” were good enough when denigrate the role of the father in the family at every turn and by your every action… Try arguing to God that your sermons on marriage were good enough when you accept Gay relationships in his Church… Try arguing to God that you are interested in the poor when you are complicit in almost every action that keeps people poor…

    What a sad picture Mervyn? It is sad. The sad thing is you leaders know deep down that society is terminally sick but (In the main) you do nothing and say nothing. So you don't care....! Or don't want the agro... Never mind God will forgive you for your selfishness....

    We shall see.. …..!

  7. joseph Golightly26 October 2012 at 08:32

    Would be interesting to know how much pensioners have benefited from state handouts compared with how much tax they have paid into the system. What is certain is that there is not a bottomless pit and that people must become more self sufficient. Perhaps we have all become greedy (not just the bankers) and expect high interest rates (witness the fall of the Icelandic banks) freebies all the time, 100% mortgages - I could go on. I appreciate it's an unfair world we live in but here in the UK we are better off than most of the world. Let's get real!

  8. with employees contributions of around 10%, I think it is fair to regard those who earned average incomes as having paid for their pensions.

    West Yorkshire

  9. For how much is overspent and where the money goes see

    I love the diagram

    West Yorkshire

  10. Before we all start laying into the old or young, it might be better to ask the question cui bono? Who actually benefits from pitting one section of the population against another? Might it be Lord Birchard and his ilk who're shouting "hey, look over there, it's that group's fault" while the real makers of the mess we're in get a) richer and b) away scot free.

    The good lord (Birchard) and some of the commentators on this thread are overlooking that to get a full state pension in the UK, you have to work and pay NIC contributions for a good many years. Pensions are earned benefits and, as such, are in an entirely different category from many other state benefits. Private pensions are, for most people, the god that failed. Some commentators above regard low incomes in retirement as the fault of the feckless retirees who didn't save as much as they should - which completely ignores the extent to which pensions are affected by factors way beyond any individual's control such as taxation policy, low interest rates, low returns on investment, falling annuity rates and so on. Not so long ago, a pension pot of £100K would buy a pension of £15K a year. Now, to get the same amount, you need a pot of about £400K. How can a person earning an average salary of around £25K possibly save this sort of money? Darren is right, the whole concept of pensions needs to be rethought, we're still operating on the Lloyd George model. It simply is not possible to save enough money during the 40 years or so a person might work to support them for the 20 years plus they might live beyond retirement.

    The disadvantageous position many oung people are in is a consequence of a whole raft of factors which have nothing to do with older people. They are far more to do with the actions of successive Governments which are beyond any democratic control. I never remember, for example, voting for the loss of control of our borders. Mass immigration has resulted in huge pressures on infrastructure, particularly housing making it hard for young people to afford to rent or buy. I don't remember being consulted about the export of hundreds of thousands of jobs overseas which has contributed to the dearth of employment opportunities for the young nor on the decline in educational standards that has left so many youngsters unable to compete with their better educated and qualified European contempories who, thanks to EEC legislation (which I didn't vote for) are free to work in the UK.

    It's much easier for the elites (of whom this particular lord is one) to invest time and energy in trying to pursuade people the the cause of their misfortune is another section of the population, than to acknowledge the complex factors that have brought about the shape we're in and their role in them.
    Fern Winter, London

  11. Pensions are only worth something if someone (young?) is willing to work for the money. If there are no young people then the pensions are worth nothing.

    Every time we print money, pensions are worth less. Every time we decide to have less children, pensions are eventually worth less, every time we decide to extend the definition of marriage, the pension pot needs to go further and so pensions are worth less.

    This is a Christian blog….. Some Christian solutions are needed here!

    What does the bible teach us about this sort of situation?

    We cannot fix people’s lives for them and anyway no amount of money will make them happy. I understand that 40 years ago the problem was thought to be how to use all the leisure time that technology would bring.

    Nobody would thought that we would be preoccupied and prefer, shopping on a Sunday to buy more tat than spending time with people.

    Tesco has lots of worshippers..I'm not joking, why?


  12. "with employees contributions of around 10%, I think it is fair to regard those who earned average incomes as having paid for their pensions."

    But have they? Paying in 10% of your income for 40 years means that you've paid in 4 years' worth of average income in total. Unless you put it all in Microsoft stock at $21 on their IPO, that is not even remotely going to bankroll 15-20 years of retirement.

    "... to get a full state pension in the UK, you have to work and pay NIC contributions for a good many years."

    And that system was set up precisely under the assumption that the current batch of workers would pay for the current batch of pensioners (as opposed to private pensions). Which is why it is in trouble.

    Private pensions have failed too, of course, because they were yet another opaque financial product that could be used by a ruthless industry to fleece people by skimming off charges and overhead. The customer bears all the risk, the bank gets the profit. It is well nigh incomprehensible to me that after all the scandals with mis-selling, massive charges hidden in small print, rate fixing and a systemic gambling addiction bringing the entire economy to collapse, it is still not evident to us that the financial industry is rotten to the core. We're still trusting them with our money.

    I suppose the problem is that no-one knows how to fix it, or has a workable alternative.

    1. Peter,

      Pension contributions of 10% will fund an inflation linked pension of aprox 20% if your contribution period is twice the benefit period and salaries grow at a constant rate equal to the interest rate. The basic pension of £107.45 is not far from this given the uncertainty in the figures

      The government has borrowed these contributions which was the only way to star paying pensions at the time the system was introduced. This does not negate the conceptual link between NIC contributions and contribution based benefits. Thus the state pension is a return on contributions and not a "hand out"

  13. Perhaps the politicians have in mind the old-age equivalent of Jonathan Swift's 'A modest proposal ...' (see