Coffee House

Ed Balls is right: it’s time to think again about pensioners

10 June 2013

10:02 AM

10 June 2013

10:02 AM

You can accuse Ed Balls of a great many things (and we do), but he doesn’t do gaffes. His interviews are always worth paying close attention to, because every soundbite is carefully-considered, weighed for its political potency and constantly reused. Anyone who missed his interview with Andrew Neil yesterday should catch it (here) because – like Ben Brogan – I suspect it marks a new direction in UK economic debate: that pensioners’ benefits should be subject to cuts, like everything else.

The curious way that George Osborne conducts his economic policy – as a constant game of chess against a political opponent – confers great power on Ed Balls. What the Shadow Chancellor says about economics matters more than what anyone else in the Cabinet says about economics. Osborne’s fateful decision to ringfence all pensioner benefits, from bus passes to TV licenses, was made in a panicked moment during election time to try to close down one of Balls’s attack lines. This was a massive error, because it’s so expensive. As Balls said yesterday, spending on the over-65s constitutes the majority of welfare spending. Protecting this sector means concentrating pain on working-age benefits and government departments. Morally, there isn’t much of an argument for increasing pensions much faster than the average salary. The ‘triple lock’ on pensions was not in the Tory manifesto, yet now stands as one of the most expensive pieces of government policy.

And we ought not to think of the over-65s as charity cases. Rather, their energy and industry is single-handedly giving Osborne his flattering employment numbers. The other day, I published overall employment numbers. Here it is again.

Screen Shot 2013-06-10 at 09.13.50


But let’s break this down by age group, and it emerges that there are fewer working-age people in employment. The incredible progress is being driven by the over-65s.

Screen Shot 2013-06-10 at 09.00.53

And this fits a trend. Let’s look at their employment rates:-

Screen Shot 2013-06-10 at 09.01.38

According to the Keynesians, the recession is caused by a lack of demand and ought to affect everyone equally. Yet British pensioners don’t seem to have received that memo. Nor do British women aged 50-64, whose workforce participation rate has surged from 60.7 per cent to 64.2 per cent over the last three recession-struck years.

It’s no puzzle, of course, to those of us who believe the dominant factor in recession and recovery is the supply of willing/able workers, rather than demand for their services.

For decades, government policy to pensioners has had – as its premise – the rather patronising idea of oldies staying at home and watching daytime TV and waiting for the next benefit cheque as they mull who to vote for. The reality is that the over-60s are Britain’s fastest-growing national economic resource. They could do with lower taxes, not higher benefits. Ed Balls may well have cracked open this argument. But I’m not sure that Balls has discussed the implications of this with the Shadow Cabinet. Given his cordial contempt for his colleagues, I suspect not.

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Show comments
  • Lex Mastermind Lotharr

    A vast number of the current crop of pensioners are the same people who spent their entire lives on IB after being shoved onto it by Thatcher. The current crop of pensioners are in fact, directly responsible for the start of the entitlement culture mindset we now see so prevalent across the UK. That mindset didn’t just happen overnight, it as been nurtured by the current crop of pensioners who passed it onto their offspring, and so on. So why should turning 65 instantly promote you from scrounger to deserving poor pensioner? Why should the scroungers of yesteryear become a protected species in their old age? Why should the young unemployed and workers have to fund the greed and entitlement agenda of the people who plunged this country into debt, ie, the current crop of pensioners? The pensioners have never had it so good and yet they never stop moaning. Perhaps they should try living on JSA income amounts, then they would have something to moan for.

  • John Smith

    Strange how the over 65’s are employable. Now, why can that be. .

  • Mike Barnes

    “According to the Keynesians, the recession is caused by a lack of demand and ought to affect everyone equally.” —–

    The TUC announces today that total pay for the UK has shrunk 7.5% (£52bn) between 2007 and 2012.

    So yeah, I think I’m sticking with the lack of demand as the reason for our prolonged depression.

  • ilpugliese

    Idiot. “Rich” pensioners lost a bundle in their savings. Time to think again about irresponsible journalism?

  • Smithersjones2013

    Of course Nelson’s piece ignores one of the key considerations. Pensioners are the voting group most likely to vote at elections and the party of the three establishment parties who benefit most from that are the Conservatives. If Balls (even if Labour take a small hit as a result) can con Osborne into to saying something untoward regarding pensions it will do significant further damage to Tory prospects with even more voters defecting to UKIP (stopping also any return of those already defected) with others sitting on their hands.

    Considering people will have to work longer to get their pension and considering how the paltry social care offering actually offered falls way short of what the Conservatives offered in their manifesto, Osborne is already on thin ice. He cannot afford to further antagonise or worry Pensioners. This is little more than standard Brownite triangulation on Balls behalf.

    The rest of Nelson’s piece is totally disingenuous because by inference he suggests that because pensioners are going back to work they must be wealthy. The incomes pensioners now get from their savings (if they had them) will be tiny in comparison to what they were pre financial crash. Has Nelson ever thought that they are going back to work because THEY HAVE TO!

    Frankly this presumptious piece with its shiny graphs is about as believable as a Libdem campaign pamphlet…….

  • Eyesee

    You really are becoming not worth reading Fraser. Ed Balls is an idiot. He may not have a low IQ but he does and says stupid things in support of a ridiculous ideology. He may even throw down a good hand occasionally but that is not a default position for him. His default is stupid, as is essential apparently for Marxists. I reckon that we should borrow whatever we need to get by, without any cuts and hang the consequences. There Fraser, I agree with you, agreeing with Ed Balls. That is his real view, not the one he sometimes quotes so slow people might think him clever.

  • greggf

    “….that pensioners’ benefits should be subject to cuts, like everything else.”

    And the first thing to be cut will be the 2.5% bit of the triple lock. Because wage inflation and CPI may go negative as the depression gathers pace, and paying a 2.5% increase to oldies when the data predicts a falling minimum wage, benefits, etc., is hardly going to bring joy to the Treasury.
    And Balls’ cap on pensions can then be sold as a floor!

  • Paddy

    Why don’t you just have telephone booths, whereby at 65 we could enter and take a couple of breaths of a lethal gas, and be done with it.

  • HookesLaw

    So Mr Nelson wants to stick the knife into as people on fixed incomes
    But that What we have become used to from him

  • manonthebus

    Pensioners on purely state pension cannot be touched or they will starve or simply require other benefits. Pensioners with company pensions are keeping up with the government’s view of inflation, but not the real inflation which affects them. Pensioners with private pensions have been beggared by BoE and government policy. Pensioners are probably savers and as such have seen their income fall drastically in the past three years. Who have benefitted from a Base Rate of 0.5%, QE of £375bn and Funding for Lending? Why borrowers, of course. So we know what government policy is. Steal from the prudent and thrifty and give it to the feckless and the spendthrifts. Just to rub it in, the Labour Party which caused all of this damage now wants to cap the state pension because it obviously thinks that old people are a right nuisance and haven’t paid enough.

    • LB

      Yes. They will starve. They will be destitute. Why do you think some of us think this is a disaster?

    • Lex Mastermind Lotharr

      Maybe they wouldn’t starve if they didn’t spend their money on xboxes…

  • Alexsandr

    let us not forget the SERPS raid to pay for the universal pension.

  • swatnan

    Looks like nothing is sacrosanct. Everything is up for review.
    Its a risky strategy and Balls could well lose the Pensioners vote. But, pensioners are the one’s who really know all about sacrifice and belt tighting in difficult times, so they might agree that we’re all in this together, if and only if, the wealthy tax dodgers do their bit, and dig deep into their pockets and pay their dues as well, and a bit more. And there Labour has the advantage, because they’ll squeeze the rich until their pips squeak, and they know it. The Tories will only give them a slap on the wrist.

  • DavidL

    Accepting that every generalisation has plenty of exceptions, we know a few things about older people. 1. They tend to be altruistic, and invest their hopes for the future in their children and grandchildren. 2. They – particularly the generation who experienced the War – have a highly-developed sense of fairness. 3. They vote.
    I believe that most pensioners will accept that they must take their fair share of “austerity” if we are to deal with the toxic levels of deficit spending and national debt. But heaven help any government that treats them unfairly.

    • Alexsandr

      ‘But heaven help any government that treats them unfairly’ for they will vote UKIP

  • Magnolia

    Fraser this is a simplistic critique.
    A lot of those oldies will have to work because they won’t have enough money to live on thanks to Mr Brown’s private sector pension raid and low, low interest rates during the recession which bring in a real negative return on savings after allowing for recent high inflation. Add in rampant energy prices and recent cold winters, reminiscent of my childhood in the sixties, and the able elderly will have to go out to bring home the bacon because otherwise they would perish.
    Labour also encouraged each and every one of us to consume and borrow and spend like there was no tomorrow and so it’s not surprising that many have nothing to live on in older age and have to work until they grind to a halt.

    • Rhoda Klapp7

      Many ladies in the sub-60 age group now will have seen in recent years:

      Retirement age raised from 60 to 63

      Number of years ‘stamp’ reduced unilaterally meaning some were asked to buy more years to get a full pension shortly before the required total was dropped.

      Retirement age raised again arbitrarily based on birth date

      Private pensions raided and annuities dropped (true for everybody)

      Numerous changes in rules making long-term planning a mockery.

      It is no wonder that they fell they need to work on. Some are extremely bitter about it. And none too pleased to find that the more provision they made for later life the more they lose to those who made no effort at all.

      To be blamed, to be thought of as the problem, when you have done nothing but follow the rules or pay your NI under threat of punishment, is more than a little annoying.

      • Magnolia

        I agree.

        My own particular bug bear is the change from RPI to CPI for pension inflation indexation which I believe acts unfairly against women survivors and which is a retrospective change.

        • McClane

          The RPI > CPI change was a government rip off, no more no less.

      • Teacher

        My state pension age was raised from 60 to 63, then to 65, and is currently 66. Correspondingly, my NI pension contribution years have gone up from 30 to 35. I can see that someone has to pay for all the jelly and ice cream that was consumed at the big party and I am happy to do my bit, but I am anxious that there will be a few crumbs left to me if I ever make it to collection day!

  • HJ777

    Actually, Fraser, he said that the majority of welfare payments go to over-60s, not over-65s.

    The problem with capping the state pension is that private sector workers are now much more dependent on the state pension than previously, due to falling annuity rates and the Brown/Balls tax raid on pension funds. Balls himself and other public sector workers were unaffected by these factors. So cutting the state pension and other benefits paid to the retired will further disadvantage private sector workers compared to public sector workers.

    • LB

      The main reason was that the money for their pensions was spent on other people, and on other things.

      I’ve done the calcs for a median wage earn. Cost of a state pension, 152K.

      Money that would have accrued in a fund, if their NI had been invested, 627K.

      The difference, 475K is the loss to a median wage earner (26K a year).

      That’s what the state has done via its Ponzi welfare system.

      • hitchslap11

        Citation please?

        £152k would buy an index linked annuity equivalent to the the BSP. The suggestion that aggregate NI contributions over a median individual’s working life would grow to £627k is highly suspect. Long term trend growth in the economy is forecasted to be 2.2%. I suspect it will be somewhat lower than that.

        • LB


          1. Compound interest forms the bulk of the return
          2. FTSE has gone up above inflation. Companies are productive.
          3. Leakage / Tax / raiding the piggy bank. Call it what you want, but money has been diverted from pensions into other things. The effect is much lower pension payouts.
          4. I suspect you also underestimate the amount of NI associated with a persons employment. Total NI payments for a median wage earner currently are over 18% a year.

          I’ll post you a link tonight.

          • Alexsandr

            have you included employers NI? suspect you have.

            • LB

              Of course.

              Its paid for the employee.

              It’s just like VAT. I presume you’re logic is that the company pays it, so its not the employees. In which case it is just companies that pay VAT because they are the ones paying the cheques.

              However, it relates to the amount paid for the employee.

              It’s just another tax on their wages, to pay for the pensions etc.

              • Alexsandr

                it was an accounting point to clarify.

                of course employees NI depresses wages. employer says we need a mole strangler. we can afford £25000. then they take off employers NI and an allowance for sickeys etc, and offer £21K

                • LB

                  OK. Here’s the way the calcs work, and I’ll post a spreadsheet later for you.

                  We have median wage now, a tad over 26K a year. Going back, median wage wasn’t 26K, so we need to work out roughly what median wage was in the past. The only proxy I’ve found is an average wage index, so I used that. When a person just retiring now started work, median wage was 800 a year. Now its clear that people won’t have been on an average wage their entire life, but remember its an average. It’s reasonable to use this to get a handle on how much they would have got.

                  it’s very difficult to get historical NI rates, so I’ve used current NI rates, calculated as a percentage and used that.

                  So we take that 800 pounds and work out the NI paid. Put that in the FTSE, make or lose at the end of the year. We get some dividends less some charges.

                  Next year, same calculation. Add the NI to the fund, make or lose, get some dividends.

                  Repeat until retirement.

                  The shocking part is that it shows people have lost lots of money. If you earned more than 26K the losses are bigger.

                  So why the difference? Its not that the things NI entitle you to cost much. JSA is very small. Bereavement benefit only goes to a handful of people. etc. The Pension is the biggy, but that doesn’t explain the huge loss.

                  The main reasons are

                  1. No compound interest
                  2. The insurance elements above
                  3. Leakage.

                  The leakage is huge. The money has been used for other things. Siphoned off. Stolen in my books.

                • Alexsandr

                  Some of NI is supposed to fund the NHS.

                  Also back NI rates are here :-

         is worth a read too.

                • LB

                  Not true on the NHS. It was proposed, but never enacted.

                  Even then, the proposal was 1% and only recently.

                  The NI rates isn’t sufficient, because you need to go back 40 years to get the rates in the past.

                  Here is what NI pays for, from the horses mouth, the DWP


                • hitchslap11

                  LB. You can’t look at the past performance of the FTSE and say that’s where Employees’ and Employers’ NI deductions should have been invested. That isn’t how it works. How it should have worked is a completely different discussion and well worth having. What I, Alexsandr and others are saying is that the payments for current year pension are paid by current year taxpayers/spending. The ratio of Taxpayers to pensioners is falling. It is a mathematical certainty on current long term trend growth rates of 1.5% that sticking to the Triple lock/guarantee pension will bankrupt the treasury by 2060.

                • LB

                  Yes you can.

                  1. You can look at it to see how good a deal the government has been compared to the alternative.

                  2. You can take the difference between the state pension cost and the investment cost, and as the question, are the other items that NI entitles you to, worth the difference.

                  3. You can, perhaps more importantly say, look if the difference is so large, perhaps the state should stop accruing any more debts that its going to default on.

                  Anyway, here are the numbers for you to peruse.


                  Now, don’t worry, I’m quite aware how the current pay as you go system works. You pay, and your money goes (to someone else). Hence the mess.

                  As for being bankrupt, if they used generally agreed accounting principles, and FRS17 and 19, they are already bankrupt. It’s only by employing Bernie Maddoff’s accountants that they give the illusion of being solvent.

                • hitchslap11

                  Will check it out. As for your first point surely we’re talking about a purely hypothetical funding scenario? As a libertarian I’d like health and education vouchers for all. Let the market decide whether state schools or NHS hospitals provide value for money.

                • LB

                  The loss is real. Beveridge’s plan was for a funded system. That morphed into a Ponzi, and now we have the losses.

                  The what if the original plan had been implemented is quite valid.

                  So the question is whether or not the state system which pays 20p on the pound, and even as you admit, is going to fail even more, is value for money and good for the UK. It’s not.

                  Now look at the consequences of doing this.

                  1. Stop accruing more debt
                  2. NI goes into a fund in your name, referenda lock on the government taking money from it.
                  3. On retirement you go into drawdown.
                  4. If and only if the money runs out, do we all help.
                  5. On death, funds go to heir’s funds.
                  6. Whilst married, half goes into the spouses fund, and the funds are ignored on divorce.
                  7. Low charges enforced by law.

                  This helps in lots of ways. 627K of wealth for a 26K worker, compared to any redistribution scheme is far better.

                  The money going into the system, means lots of money for investment. Far more than the state can provide. This produces growth. So long as you control low skilled migration, then there is growth for the low skilled on benefits. It also deals with the civil service. With their pensions on the line for their decisions, they will be less keen on causing damage to the private sector to keep their pensions.

                  Simple, uses the existing system to collect the money.

                • hitchslap11

                  Point of order Alexsandr. I assume you meant Employer’s NI? This will get really confusing really quickly!

                  Mole Strangler? Hah!

                • Alexsandr

                  sorry -yes. employers

              • McClane

                It’s not paid for the employee, it’s paid by the employee because otherwise the company could have paid their NIC contribution to the employee as part of his/her wage.

        • LB

          Data from the Office for National Statistics (ONS) shows that the amount of money a man of 65 needs to obtain a retirement income of £5,000 per year has increased by a whopping 29% in the last three years.

          ONS research shows that a man reaching the state pension age in March this year would need a massive retirement pot worth £152,800 to purchase an annuity paying out £5,000 for the rest of his life.


          So should I have rounded up or rounded down?

    • McClane

      I’m over 60. I don’t see any welfare payments coming my way.

  • itdoesntaddup

    So 90% of pensioners are unemployed or unable to work, and can have their benefits cut according to Fraser. Moreover, Parliament has just given a third reading to the Lib Dem Expensive Energy Bill that means we’ll all need a winter fuel allowance given the policies it promotes – provided we don’t die of hypothermia while taking our share of the 104TWh cut in electricity consumption it mandates.

    Meantime, the Treasury saves its skin by getting the Bank of England to rig the gilts market and screws pensioners forced to have gilts based annuities by law – halving inflation linked annuity rates, and only returning the real value of capital to those who live to be 100. That’s like imposing a 50% income tax on pensions.

    In England you must dispose of all your assets if you require nursing home care, made expensive by the bubble property charges rather than the care assistants, as Southern Cross demonstrated.

    Against such insults, the triple lock on the miserly state pension is no more than a sop. If we instead pursued a sensible energy policy, the WFA could be cut entirely, with pensioners benefiting from lower bills even without it. An end to pension fund tax raids, ZIRP and compulsory investment in gilts would encourage savings and thus less reliance on the state for pension income.

    You must look at the whole picture, not a narrow slice of it.

  • Austin Barry

    Surely, the NHS is doing its best to cull oldies?

  • UlyssesReturns

    Can someone explain to me why the elderly, who in the main have contributed all their lives and now continue to contribute by returning to work, are less deserving than those who do not, or will not work in order to maintain their lifestyles? If pensioners are about to be punished to continue the support of the Brown/Balls welfare-dependent client state then this will become a political error of the first order.

    • Colonel Mustard

      Because they are a softer target and the proposition will run well with the ageism now increasingly demonstrated by the rich young yahoos in the bubble?

      • Andy

        And lots of ’em vote Tory. Thus easy target for Labour.

    • Pembers

      Pensions like unemployment benefit are welfare, If they had paid in enough to a ring fenced pot they your argument would stand up , they haven’t , it doesn’t . National insurance is an income tax on those who receive a salary and who are not self employed

      • Colonel Mustard

        The self employed pay two tiers of National Insurance. Even for those on low income the amounts are not insignificant.

      • LB

        Nope. They are debts, not welfare.

      • telemachus

        Exactly Pembers

        Ed Balls is a genius

        Why on earth should rich folk like Osborne’s dad (17th Baronet)have bus passes winter fuel allowance and even the basic State Pension?

        If they do why are they not subject to 45% tax?

        Why on earth should anyone get an inflation proof pension when those of us struggling to earn a crust see our real earnings going
        down year on year?

        Why should the tax bands increase for the wealthy elderly?

        The aim of politics is fairness and egalitarianism, not a wealth accruing machine for the already wealthy to go on until they drop,
        now 30 years after retirement

        In the interests of equality Ed must now address inheritance tax

      • ilpugliese

        They are benefits enshrined in the various pension acts. No amount of calling them “welfare” is going to change that. Do you think state education, the NHS and the fire brigade are welfare?

    • monty61

      I’m no fan of Balls or what he stands for but in this regard he happens to be correct, Osborne’s ‘all pensioner benefits are sacrosanct’ announcement was a bad call and has led to bad decisions.

      If this is true then it’s quite right to call it out.So far as I can make out the Speccy has never been a Central Office fanzine engaging in boosterism of current Tory policy just for the sake of it. It’s not Russia you know.

      • LB

        They aren’t benefits. They were paid for up front.

        • monty61

          Pension benefits are benefits. A contribution has been paid which confers some kind of entitlement to pension benefit. The level of that benefit has no direct link to the contribution. Nothing was ‘paid for’.

          It works nothing like either a defined benefit pension scheme (where the amount to be collected is defined by the length and level of contribution), or a defined contribution scheme where the money is invested and the final ‘pot’ used to purchase an annuity.

          Are there really so many people around who don’t understand this?

          • LB

            Yes it was.

            What you are doing is acting as an apologist for a bunch of fraudsters. I’m quite aware of your argument, and it is flawed.

            If you take money from people voluntarily, promising to pay out money in the future (according to set of terms agreed up front), it forms a contract in law. That is the case with NI, and in particular with people making voluntary contributions.

            To not report that as a debt, misleads people into thinking they aren’t at risk. To expose people to risk of loss (doesn’t even have to be a loss), is a fraud under sections 1-5 of the 2006 fraud act.

            I know exactly how the system works. The payments for a year entitle you to 1/30th of a pension that is linked the max of (iwage inflation, CPI, or 2.5%). That’s what you are paying for and its an efforceable contract.

            If you don’t believe me, lets say the DWP fails to pay out on your pension, because its confused you with another Monty. Can you sue to get the pension paid? Yes. It’s an enforceable contract.

            • monty61

              Risk of loss? What loss?

              The level of benefit at any time is precisely what the Government says it is (and in this respect you are correct above).

              There is not, and never has been (even under the Blessed Margaret) any direct link whatsoever between what’s paid in and what is paid out.

              It’s extreme naivete to believe otherwise.

              • LB

                1. NI isn’t a tax. You can make voluntary payments to get extra years. That makes it (or at least these contributions, a payment).

                direct link whatsoever between what’s paid in and what is paid out.


                In part. There is a link. If you pay NI for a year, you get what it says on the tin. 1/30th of a state pension. That is 110.15 linked to the max of wage inflation, price inflation or 2.5%.

                That is the contract.

                Where I do agree with you is that the state can come along and change the law to rewrite that contract to pay whatever it wants to. They make the law, and the can pass a law that says we are not subject to the 2006 fraud act.

                Now on the link between paid in and paid out. Lots of people pay a lot of NI, and everyone gets the same payout. Is that what you mean by no link? If so, I agree.

                However, if you are saying the contributions do not build up rights to a payout, you are wrong.

                • monty61

                  Indeed they build up rights ‘to a payout’, but (as we seem to agree) not to any kind of defined amount calculated on the sum collected .. and nothing at all for any contributing years after 30.

                  I am 52, I’ve been contributing to NI since my first student job at 18, and I have 15 years to go before I can collect anything. That will be 49 years of contributions. Feels like a tax to me, however I don’t really have any problem with that.

                • LB

                  indeed they build up rights ‘to a payout’, but (as we seem to agree) not to any kind of defined amount calculated on the sum collected .. and nothing at all for any contributing years after 30.


                  But the difference is that the rights are to a defined payout. That’s in writing and it is an enforceable contract.

                  If the government wants to change the contract, it has to introduce a law to revoke the contract unilaterally. From the lack of pensions debts being reporting in the accounts, that’s a fraud. Section 1-5, 2006 fraud act. Try searching and reading that bit.

                  Now, you will feel even worse going forward. The debts 2 years ago were 5,010 bn and rising at 734 bn a year. The UK state can’t pay that, because the UK population can’t pay it.

                • McClane

                  NICs go to the National Insurance Funds. NIFs are forecast to be in surplus by £30bn in 2016. So where are the debts coming from?

                • LB

                  You have to understand what the state means by a surplus. In any normal accounting scheme, surplus = profit.

                  The state takes in NI, and pays out pensions. The difference is the profit or surplus. That appears on the profit and loss side. This is reported.

                  However, what the accounting standards then say, is that all those rights that people are accruing, have to be booked as a liability. What is booked is the current value. This is different from the actual payouts which is a much larger number.

                  For a pension fund, they then buy assets with the contrbutions, and the present value of those are booked opposite the liabilties. The difference between the two tells you if the fund is health (more assets than liabilities), or at risk (assets less than liabilities).

                  Now, the state pensions are unfunded. That means no assets. Zero. The liabilities? Er, we’re going to hide those off the books. The reason is obvious. People would see that they are bankrupt.


                  Contains the estimates of what is excluded, and two years ago it was 5,010 bn rising at 734 bn a year.

        • McClane

          I checked with the DWP. I paid my full stamps (as we used to call NI contributions) over my career so I am now entitled to a full pension. My neighbour unfortunately didn’t. And nor did her husband. She lived abroad with him while he was working abroad. Neither paid stamps. Neither are entitled to a full pension.

          There is a clear link between payments in and payments out. If Ed Balls thinks otherwise he needs to tell the DWP.

    • Gareth

      You can suggest it, but it shows that your political support is entirely partisan rather than based on the intelligence you claim. If your mantra is that “X is always right and Y is always wrong”, you leave yourself open to accepting policies which are poorly thought out, and arguments poorly supported by evidence. Your comments are unlikely to add anything to the political scrutiny which it is so vital for thoughtful followers of politics to provide to the national debate.

      If you’re not able to find at least one thing on which you disagree with your party of choice, and at least one thing on which you agree with your “enemies”, you’re probably not doing any intelligent thinking at all.

      • UlyssesReturns

        Lighten up for Christ’s sake. Hyperbole and irony banned now are they? Having said that, if I know someone is incompetent and a liar, and both apply to your friend Balls, then I am unlikely to believe anything they say. The same applies to Messrs Blair, Brown, Mandelson, Miliband, Campbell, Harman, Byrne, Watson,………..

        • Magnolia

          Byrne’s not a liar.
          He said there was no money left and he was right.

          • dalai guevara

            yes, but people didn’t think that was funny.

          • Wessex Man

            wsan’t he the bloke who had himself super imposed on a photo?

            • Magnolia

              No he wasn’t.
              I was referring to Liam Byrne who is Baldemorte!

            • John Smith

              Was that not ‘pants ‘ Bryant?

        • Gareth

          I’m chilled, man! I share your concern for honesty in politics; it needs people to weed out the lies and misrepresentation. But do you really think that it’s one-sided? Members of this government have been rebuked for misrepresenting statistical data four times in recent months. Several Tory MPs are facing allegations about accepting money from lobbyists. Are you as concerned with all that as you are about Ed Balls?

          • UlyssesReturns

            I am far more concerned about dishonesty from my side than I am from yours. However, this article was about Balls, not Yeo or Mercer. I would suggest, by the by, that whatever lies or misrepresentations we have had so far from this sorry excuse of a government, they pale into insignificance when compared to the corruption and deceit of the 13 years of labtard misrule, not least of which would be the lies that ended in the deaths of hundreds of thousands of Iraqis, Afghans and British servicemen.

  • Q46

    The term pension misselling springs to mind. Give your money to ‘me’ to invest in a ‘fund’ rather than you keeping the money and investing it as you wish, or not at all, and I will see you right from the age of 60 years onward if you are female and 65 years if male.

    That seems clear.

    The ‘me’ in question was the State, but had the ‘me’ in question been a private individual or company, who instead of investing the money had spent it in their own interest and for their own advantage I am fairly sure that would be a crime… fraud I think.

    As would giving claimants the run around by putting off the date at which payout was due.

    And since contributions are taken by force, theft can be added to the charge sheet.

    That it may now be right to close the State pension scheme to everyone say under the age of 30, so they are free to make their own arrangements, and remove the ‘retirement age’ for these is one thing, but there is a contract running for those who were ‘sold’ State Pensions and that contract should either be upheld, or compensation paid and some legal sanction taken against those still alive who connived to keep the scam going.

    Oddly there is a hue and cry to pursue Jimmy Saville OBE beyond the grave for fondling of a few, but where is the pursuit of those who have swindled generations?

    So much for rule of law and justice.

    • monty61

      It’s pretty clear reading this that you have misunderstood completely the nature of the state pension. You might want to look it up.

      • LB

        I don’t think he has. I think its you who have misunderstood.

        The state has been running a Ponzi scam, contrary to sections 1-5 of the 2006 fraud act. That’s its nature.

        Now, we have them trying to default on a contract. That contract is clearly laid out on the DWP website and on paper.

        • monty61

          Hilarious. Tin foil hats all round.

  • Shinsei1967

    ” Osborne’s fateful decision to ringfence all pensioner benefits”

    To be fair to Osborne this wasn’t his decision. It was Cameron who was bounced into making this rash promise in the pre-election debates.

    So it was never an economic decision of the Tories but rather a political one.

    And no division in politics is currently starker. The elderly are clearly the biggest voting bloc and thus need to be courted. And most of them clearly feel that after a lifetime of hard work they deserve their index-linked pensions and benefits.

    On the other hand the economic case for curtailing their benefits is also clear. Unless we intend to substantially raise the amount of tax revenue in the UK from its current 38% of GDP. The maths just doesn’t work otherwise. No amount of “efficiency savings” or getting rid of quangos or reducing fees to the EU or scrapping Trident comes anywhere close to finding the extra tens of billions old age pensions will cost in future.

    • Colonel Mustard

      “No amount of “efficiency savings” or getting rid of quangos or reducing fees to the EU or scrapping Trident comes anywhere close to finding the extra tens of billions old age pensions will cost in future.”

      Which is no justification for keeping them. Perhaps the previous government should have thought about this before embarking on their projects to substantially increase the benefits-dependent population.

      • Shinsei1967

        Don’t disagree, just think that this is a separate issue. There’s 101 things I might want to cut from government spending. And 101 different things a Guardian reader might want to cut.

        The point is that the scale of the pensions increase (and NHS spending on the elderly) is so vast that it needs solutions measured in the tens of billions not the 100s of millions.

        And the only solutions I can think of are one or a combination of: a very much higher tax burden; a very much higher than expected growth rate; and a substantial reduction in the services provided by the state.

        • dalai guevara

          You make an important point.

          The o n l y solution is to get fracking and sell at least some of the proceeds. There simply is no other magic income stream.
          Otherwise, large parts of this nation’s population will return to coal fires, heavy curtains and chippy dinners.

          • Colonel Mustard

            “Otherwise, large parts of this nation’s population will return to coal fires, heavy curtains and chippy dinners.”

            Lovely. Now if only we could have the mature and grounded politicians that went with that too.

        • Andy

          Guardian readers never want to cut anything. They are fiscal morons.

  • Patrick

    Are you saying it is the fault of people who are or become disabled and are unable to work?

  • Billwalpole

    Pensions are not “Welfare”.

    That the state wasted the money is not the fault of those who paid in for 45+ years.

    • monty61

      It’s time this particular fiction was nailed well and truly. National Insurance is and always has been a tax like any other, it’s not ring-fenced and invested like a real pension scheme, and its payout value cannot be made to exceed what the country can afford. The level of pensions is a fiscal/political calculation not an actuarial one and it’s ridiculous to claim otherwise.

      • Colonel Mustard

        Er, notwithstanding the history and title, this from the government’s own website:-

        “You pay National Insurance contributions to build up your entitlement to certain state benefits, including the State Pension.”

        I don’t pay income tax, VAT or any of the various stealth taxes as “contributions” or to “build up” my entitlement to the various and sometimes dubious services and activities paid for in the state’s budget.

        National Insurance might be administered badly in comparison with other forms of insurance, the proposition might be unsound but it is still a promissory transaction between the individual and the state with an implied expectation of being honoured.

        • monty61

          The key word here is entitlement to a state benefit. The amount is set by the state, and bears no relation to the money contributed. The only contract is to provide you with something, which will certainly be honoured. But the level of that something is entirely – and legally – at the discretion of the state. This has been the case since state pensions were first introduced before the first world war.

          • Colonel Mustard

            Actually the 1911 Act was founded on actuarial principles in respect of unemployment “benefit”. The annuity payments from a private pension fund could also be called benefits and in some cases are also subject to change. I suppose moving the goalposts, something all governments are good at, extends to their re-writing of history too.

          • Andy

            Unfortunately the National Insurance ‘fund’ is in deficit. In 2012/13 Pensions cost 79.321 billion; widows pensions 0.571; incapacity benefit 2.591; Unemployment 3.463; Maternity 0.373 and Admin 4.693. That give a total of £91.012 while resources were £84.263.

            • Sealate

              Is that pension cost just the state pension or all pensions such as military pensions?

              • Lex Mastermind Lotharr

                That’s just the state pensions.

            • Lex Mastermind Lotharr

              Well said, we know who the true scroungers are.