Attending the HC Work and Pensions Committee yesterday to discuss the new proposed single tier pension as suggested in the Green Paper, “A State Pension for the 21st Century”, one idea was repeatedly raised by the MPs – what to say to constituents who say that they contributed all their lives to National Insurance, only to see their neighbours and others who did not pay, nor make the same sacrifices in consumption, get the benefit for free. This is a serious anticipated political barrier to change.
It’s a very difficult political problem, because we have to win the hearts and minds of the public for a major philiosophical change from a contributory to a universal system. This is a political, moral, ethical and philisophical argument, and very different to the one we have been making in our pension system up to now. The truth is, we moved from a contributory system many years ago, even decades, with the proliferation in deemed credits to national insurance, and then the introduction of comprehensive, well funded means tested benefits for pensioners (even if a third of those eligible don’t claim). But for political reasons, politicians and officials always pretended that the contributory system was alive and well. Now the name of the game has to change, our discourse and rhetoric have to change, we have to reconceptualise the population as all deserving and worthy of a decent life, and we have to argue that universal benefits bring solidarity, and citzenship entitlements. Incidentially, it also means that those who save more will get the full benefit of their savings, without risking that others who don’t save just get government handouts. Indeed, without abolishing the means tested system, the new proposed NEST workplace pension just won’t work, and the financial services industry can’t ethically sell products to those with relatively low lifetime incomes. So, while this isn’t the stuff that will sell it to constituents, all sides of the political spectrum would benefit from the new proposal.