Monday 7 March 2011

It's good to see that they read each other's press releases

There's an article in the FT explaining that Lord Hutton is going to lift more ideas from UKIP's pensions manifesto and curtail the generosity of public sector pension schemes a bit (lower salary increases, higher contributions and career-average rather than final-salary etc) all good stuff, but what troubles me is Hutton recycling the old canard:

... it is in no one’s interest for large numbers of staff to opt out and end up on means-tested benefits.

1) So what? If means-tested old age benefits cost the taxpayer less than final salary pension schemes, that's not an issue.

2) As it happens, IDS took another leaf from UKIP's book and proposed merging the State Pension and the Pensions Credit into a flat-rate Citizen's Pension of £140 a week anyway, so in theory there won't be any means-tested benefits*.

Whether public sector employees should get their public sector pension in addition to the £140 is a separate debate (I would argue not, of course).

* Means-testing (being a brutal form of taxation) is as much anathema to me as 'contributory benefits' (which is an excuse for higher taxes while you're working), and in any event the two are more-or-less opposites so we can rule them out. This leaves us with the sensible middle-ground of universal flat-rate benefits (we can argue about the rate in £ per week, whereby £nil is an option worth considering, if only for the fun of ruling it out again).

3 comments:

James Higham said...

As it happens, IDS took another leaf from UKIP's book and proposed merging the State Pension and the Pensions Credit into a flat-rate Citizen's Pension of £140 a week anyway, so in theory there won't be any means-tested benefits*.

Sounds great - when's it start?

Mark Wadsworth said...

JH, I dunno when it's going to come in. There was another article about it in the City AM this morning.

Scott Wright said...

"I dunno when it's going to come in. There was another article about it in the City AM this morning."

If it's to be introduced before the end of the "fixed term" parliament (i.e. 2015) then its good news for certain members of my own family. Good news for the economy too - Bonus!!