I have just finished reading James Bartholomew’s fine book, The Welfare State We’re In, which lays out, in tightly argued detail and a welter of colourful character sketches, the disaster wrought by state welfare in Britain. One of his chapters deals with the state’s actions in the area of pensions, now a red-hot controversial area for politicians not just in Britain, but in much of the industrialised world where populations are greying and birthrates falling.
Today, it appears that Britain’s finance minister, Gordon Brown, may have pre-emptively stiffed a report, due out next week, from the Pension Commission panel. The Commission is thought to be advocating measures such as tackling the disincentives to saving caused by means-testing, and in raising the state pension age to 67 or more.
Whatever happens, Bartholomew’s diagnosis of our ills is a powerful one and lays out the brutal fact that our political class, if judged by the same laws as applied to financial firms like insurers, banks or fund managers, would be indicted for fraud on an epic scale. It makes one weep to think of the opportunity that was lost in the destruction of Britain’s fast-growing private savings culture prior to the First World War.
I can also strongly recommend Bartholomew’s blog.
Readers of this review might also like to refer to Frank Field’s review of the same book.
Bishop Hill, many thanks for that. Wow. That is meaty stuff coming from a Labour MP.
I’m amazed Frank Field still survives in Nulabour. It’s hardly surprising that poor Frank, who took on Blairs remit, “To think the unthinkable” about social security, made a hasty exit from government.
I heard James Bartholomew some months ago when he was launching the book, and he came across as being unwilling to accept the possibility that someone might want to be an entrepreneur and yet still give the proper attention to their family dependants (older or younger) that they might need or deserve.
It’s a big step to break out on your own for the first time (although you wonder what the problem was once you’ve done it) and I thought that there should remain some specially generous welfare available for the families of failed first-time entrepreneurs – otherwise there will be plenty of people who won’t take the chance because of their totally grown-up unwillingness to risk trashing their own families.
His mentality was “sod your family and go to the banks”, which I thought was the kind of conceited immaturity you expect from a jumped-up childless politics graduate instead of someone his age.
I’d be happy to double the welfare available to people willing to work hard and take a big risk, if I could halve the welfare available to layabouts.
Ron, I am not quite sure what point you are making. Are you saing that JB thinks there is some conflict between running your own business and raising a family? That’s not my reading of the book.
I’ve read the book and heard James Bartholomew several times on the radio.
He is unfailingly calm and polite (in contrast to some who oppose his views) – but he does, unfortunately in my view, come across as a social authoritarian. I think this gives an unfortunate impression that he is ‘uncaring’.
It would be better, in my opinion, to be socially liberal – i.e. in favour of people making their own decisions without being judged or coerced, provided they pay and face the consequences of such decisions themselves.
I’ve read the book and heard James Bartholomew several times on the radio.
He is unfailingly calm and polite (in contrast to some who oppose his views) – but he does, unfortunately in my view, come across as a social authoritarian. I think this gives an unfortunate impression that he is ‘uncaring’.
It would be better, in my opinion, to be socially liberal – i.e. in favour of people making their own decisions without being judged or coerced, provided they pay and face the consequences of such decisions themselves.
Jonathan: I think Ron is saying that there should be more welfare for failed entrepeneurs (to encourage them to take risks), and that James Bartholomew disagrees.
I’m with Bartholomew. The only result of such a policy would be an increase in the number of failed entrepeneurs.
Rob, absolutely!
Rob, I think there would definitely be an increase in failed first-time entrepreneurs – for the simple reason that there would be an awful lot more first-time entrepreneurs out there to do the failing. At the moment, it’s only those who are without dependants and either totally financially secure or rashly confident who can really take the risk.
But there would be an awful lot of the new entrepreneurs who would not fail – and perhaps a lot of the first-time failures would have learnt enough to have another go and not fail the second time around. The industrial benefits to the country would hugely outweigh the cost of the extra welfare “benefits” – although perhaps these could be clawed back from the stay-at-home claimants and be financially neutral to the welfare budget.
Before I started as a software contractor, the huge insurance company I worked for had all sorts of perks (like cheap mortgages at a third of the commercial rate) and an unspoken but very pervasive atmosphere circulating that it was a big bad world out there where you’ll DIE if you leave us – all aimed at making you stick with their lousy salaries. It was only the bravest of us that broke out. I think the same attitude pervades a lot of large organisations, and there are a lot of talented people who can’t raise the momentum to escape, who would do if they felt that their dependants would still “be OK” regardless.
As I said before, I wouldn’t grudge increased welfare to someone with dependants who had been bold and tried to stand on his own two self-reliant feet – it’s the professional benefit scroungers that annoy me – and I think there should be some very visible distinction between the way each type is treated.
Think of it this way – how many of us would have learnt to ride bicycles as young children if none of us had been provided with bolt-on stabiliser wheels? Or learnt to swim if we’d never been provided with floats and inflatables? Some brave souls would have managed it as young children regardless, and some others would have had another go when they were 10 or 11 – but there would be many many adults who couldn’t swim or ride a bike – all for the sake of a few bolt-on wheels or inflatable rings.
AND… back to the original subject of pensions… why does Gordon Brown continue to get away with his £5 billion Advanced Corporation Tax raid on people’s pension funds?
Ron, I honestly don’t know whether a generous welfare state is the sort of thing one needs for an entrepreneurial culture. The U.S. is more entrepreneurial than France, and the former nation spends less per head on welfare than is the case with France. I don’t see a lot of business vigour in the burning suburbs of Paris.
After all, when enterprise took off in Britain in the 18th Century, we had the old Poor Law and a level of state provision that was miniscule by comparison with today.
It’s very easy to forget that Pensions plans are always for the future… which means that
(a) politicians ‘can’ neglect them altogether if they have the nerve to do so (it won’t be their problem any more by the time it eventually happens); and
(b) inviting people now approaching pensionable age to pass judgement misses the point (those who will benefit or otherwise from proposed changes are at this point years away from retirement – and have all being well a longer life expectancy than those now retiring).
In other words, politicians who are currently trying to address the issues, whoever they are, of whatever party and at whatever level of seniority, need to be able to get on with the debate and engage with the rest of us. Let’s wait and hear what they really have to say on this topic at least – it’s in all our best interests to have a sensible discussion, as I’m sure everyone will agree.
And isn’t it good news anyway that most of us can expect a long retirement, even if we do have to work another couple of years beforehand? The evidence seems to be that early retirement doesn’t necessarily make for a longer and happier life…… Would be interested to hear what people know about this??