The Corner

Loser Watch

Britain is unusual in Europe in that it does not face the sort of pension crisis that faces the rest of that ageing continent. One reason for this is demographic, another is that far more Brits have privately-funded pensions (even if the stock market nightmares of recent years have diminished the value of that cash pile) than is usual in the EU and the third is that, since a reform introduced by Mrs. Thatcher, the state-provided pension is no longer automatically linked to increases in average earnings. Mrs. Thatcher’s aim was to encourage people to provide for their own retirement and also to avoid burdening the state with obligations that it could not possibly meet. To his credit, Tony Blair has resisted attempts to revert to the old (earnings-linked) system, something that would (at least in the short term) be worth more than a few votes.

Now it appears that this system is facing a new threat – from the Tories no less. They are reportedly going to promise a return to the old regime so correctly abolished by Mrs. Thatcher. This reform will supposedly be ‘paid for’ by a series of spending cuts elsewhere. Those cuts would be, one suspects, illusory, but, more to the point, there is almost no chance that the Conservatives will win the next election. So, in reality what they have done is made it far more difficult for Blair to defend one of the more sensible reforms of the Thatcher era. If, as a result, Labour do revert to the old system, you can be sure that they will do so without any attempt at economies anywhere else.

Thanks a bunch, Tories.

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