Blue Labour 2

N1AK

CLAPTON wrote: »

Whilst I understand why people do not understand, people will eventually have to understand that some-one with a private pension is exactly the same 'burden' on the working population as some-one with a state pension.

So the proper debate is what proportion of the cake (GDP) should pensioners receive and how should this be presented (reduced gross wages or reduced net wages?).

The figures of 6-7% for the state pensioners seems both modest and completely affordable given they constitiute a higher proportion of the population than that.

With respect that's a completely nonsensical comparison. If Pensioners only consumed the state pension and no other government service it might have some meaning.

Your private pension analogy is also inaccurate, although contains some truth. Tax relief on pensions is effectively taking from public income but the tax relief is only a small part of the pension amount. Even someone who only contributed to a pension when getting 40% tax relief is costing 60% less to other tax payers when they receive their pension.

In the 1970 Welfare (which included pensions) was 18% of government spending. In 1980 it was 24%. 1990 was 26%. By 2000 we finally split the two out and pensions were 19% (welfare sans pensions was 17%). If ~20% of the government budget going on pensions is so eminently affordable why haven't we been doing it before?

Welfare (inc pensions) and health in 1980 was 35% of all government spending. Now it's 53%; that's 18% of government spending that used to be spent on building the nation (infrastructure, schooling, housing) that has been sacrificed to short term survival-ism.

The one thing we do seem to agree on is that pension spending should be defined in the context of total spending or the economy; although we may disagree on the proportion it should be allocated :T

CLAPTON

N1AK wrote: »

With respect that's a completely nonsensical comparison. If Pensioners only consumed the state pension and no other government service it might have some meaning.

Your private pension analogy is also inaccurate, although contains some truth. Tax relief on pensions is effectively taking from public income but the tax relief is only a small part of the pension amount. Even someone who only contributed to a pension when getting 40% tax relief is costing 60% less to other tax payers when they receive their pension.

In the 1970 Welfare (which included pensions) was 18% of government spending. In 1980 it was 24%. 1990 was 26%. By 2000 we finally split the two out and pensions were 19% (welfare sans pensions was 17%). If ~20% of the government budget going on pensions is so eminently affordable why haven't we been doing it before?

Welfare (inc pensions) and health in 1980 was 35% of all government spending. Now it's 53%; that's 18% of government spending that used to be spent on building the nation (infrastructure, schooling, housing) that has been sacrificed to short term survival-ism.

The one thing we do seem to agree on is that pension spending should be defined in the context of total spending or the economy; although we may disagree on the proportion it should be allocated :T

My point has nothing whatsoever to do with tax relief.

It's entirely to do with how much pensioners (or other non productive people) 'consume' of the total GDP cake.

Basically if we have a cake of a certain size and pensioners consume X% then there is only 100-X left for everyone else.

It doesn't matter whether pensioners 'pay' for that consumption from savings, from profit funded pensions, from gilts funded pensions or from direct taxation funded pension.

Jennifer_Jane

Sorry, Clapton, I just don't entirely understand your post.

Pensioners are consumers almost as much as working people (and I'm waiting for a £3,200 bill for new windows and Gutters, Fascias and Soffit replacements even as we speak (and I had lunch out today too).

In addition, they are taxpayers just like everyone else. If there are pensioners who don't pay tax, it is simply - like everyone else - that their income is below the tax threshold.

So your post is about workers (let's say builders, nurses, admin assistants, sales assistants) and non-workers (let's call them pensioners, as well as people with their own private income and people more typically described as on benefits for various reasons).

That's where I do partly agree with you, in that non-working people are only contributing to society via the tax system rather than the actual work that they do.

The difference between pensioners and other non-working groups, is that pensioners are older, and have directly, specifically, and quantifiably contributed to the State National Insurance scheme.

But I do see that pensioners and anyone who is not working, depend to a massive degree on people who do work (window replacement people, dustmen, waitresses, whoever) to enable their lives to function.

grizzly1911

Jennifer_Jane wrote: »

Sorry, Clapton, I just don't entirely understand your post.

Pensioners are consumers almost as much as working people (and I'm waiting for a £3,200 bill for new windows and Gutters, Fascias and Soffit replacements even as we speak (and I had lunch out today too).

In addition, they are taxpayers just like everyone else. If there are pensioners who don't pay tax, it is simply - like everyone else - that their income is below the tax threshold.

So your post is about workers (let's say builders, nurses, admin assistants, sales assistants) and non-workers (let's call them pensioners, as well as people with their own private income and people more typically described as on benefits for various reasons).

That's where I do partly agree with you, in that non-working people are only contributing to society via the tax system rather than the actual work that they do.

The difference between pensioners and other non-working groups, is that pensioners are older, and have directly, specifically, and quantifiably contributed to the State National Insurance scheme.

But I do see that pensioners and anyone who is not working, depend to a massive degree on people who do work (window replacement people, dustmen, waitresses, whoever) to enable their lives to function.

Pensions either have to be provided by either denuding yourself voluntarily, to pay for your own pension, or forcibly through taxation to provide for it centrally.

Either way it has to be funded form GDP.

It just depends how it gets divided up.

The fact that we are going to have 2.5million unemployed people ( a pot I am not saying it will be the same individuals) ad infinitum would suggest that as society some will never contribute sufficient whichever route is chosen.

N1AK wrote: »

And yet it is still more than we can afford to maintain for future pensioners and costs more than those claiming it paid in when they were working.

I'd love it if money grew on trees and we could give pensioners masses of money without any consequence but we can't; the current government policy is to bribe pensioners (and people who think decent pensions today mean decent pensions when they retire) and have no way to provide the same level of support to future pensioners; which isn't a policy I support.

If as you suggest we can't afford to pay £110 per week in basic state pension. What should that figure be? For those that then can't afford to subsist on whatever figure that maybe, where, how should they live and where will the funding come from. What, in this rich country of ours, is the right level of subsistence for someone that has worked long and hard and always paid their dues?

How do you know we will not be in a position to pay similar minimalistic pensions going forward? If we can't afford pensions then what are we going to do with our old when they run out of resources to fend for themselves?

CLAPTON

Jennifer_Jane wrote: »

Sorry, Clapton, I just don't entirely understand your post.

Pensioners are consumers almost as much as working people (and I'm waiting for a £3,200 bill for new windows and Gutters, Fascias and Soffit replacements even as we speak (and I had lunch out today too).

In addition, they are taxpayers just like everyone else. If there are pensioners who don't pay tax, it is simply - like everyone else - that their income is below the tax threshold.

So your post is about workers (let's say builders, nurses, admin assistants, sales assistants) and non-workers (let's call them pensioners, as well as people with their own private income and people more typically described as on benefits for various reasons).

That's where I do partly agree with you, in that non-working people are only contributing to society via the tax system rather than the actual work that they do.

The difference between pensioners and other non-working groups, is that pensioners are older, and have directly, specifically, and quantifiably contributed to the State National Insurance scheme.

But I do see that pensioners and anyone who is not working, depend to a massive degree on people who do work (window replacement people, dustmen, waitresses, whoever) to enable their lives to function.

It might be helpful to think about the issue in two completely separate ways

firstly think about what is produced and what is consumed and ignore money altogether

basically (unless you have hoarded lots of tinned food) once you are retired then you contribute nothing to the GDP (i.e. you produce no goods and services)
but you do consume goods and services.

it is the working people that produce all the goods and service that non working people consume

so it follows that working people forego some of the fruits of their labour to provide goods and services to non workers.

It is how the GDP (all our goods and services) is split up that becomes the problem


seconldy think about the money as we don't actually exchange goods and services directly we use money instead.

so the money pensioners have can be exchanged for those goods and services
that money comes from government (state pensions) from private pensions (profits of companies, gilts (government debt, savings a/cs)
from the point of view of the working people the goods that they forego shows its self by the taxes they pay and the profit that their compnaies make and their own savings


the issue for the future is how the GDP cake is divided up and what monetary mechanisms are used.
taxation is very unpopular while savings seems to be a good thing; but the working people actually forego the same amount of production whether it's tax or savings or company profits

nicko33

CLAPTON wrote: »

it is the working people that produce all the goods and service that non working people consume

so it follows that working people forego some of the fruits of their labour to provide goods and services to non workers.

but there would be less labour for the workers without the non-working consumers

CLAPTON

nicko33 wrote: »

but there would be less labour for the workers without the non-working consumers

The sub thread discussion is that we won't be able to 'afford' to provide pensions for older people because of the 'burden' on taxation.

I'm trying to point out that whether or not the income (and hence consumption) of older people is from state funded pension or private pensions/saving makes no difference to the people who are producing the goods and service consumed.