[A-List] UK legitimation crisis: pensions

["Michael Keaney" <michael.keaney@xxxxxx>]

Very neat -- the Guardian privatises responsibility for the current pensions
crisis. The analysis here is certainly true -- as far as it goes, which is
not even out of my office door. The truth is that we have an economy that
has been systematically reconstructed around the privatisation of fiscal
policy, exemplified by the extraordinary efforts of the Bush administration
in the aftermath of the twin towers attacks last year -- highly indebted US
consumers are encouraged to save the economy by spending more. It's the same
in the UK, which has its own identical problems -- ballooning trade deficit,
ballooning household debt, increasingly shaky bank sector. Sure we could all
have been more cautious, but didn't Thatcherism have something to do with
it? Isn't neoliberalism simply the accelerated concentration and liquidation
of assets that is the underlying logic of capitalist accumulation? Time was
when that sort of analysis would appear in the pages of the Guardian -- when
it was bashing Callaghan-led Labour from the left. Now it's busy saving Tony
any which way it can.

------

We lived for today - and we'll have to pay tomorrow

Consumer culture is the real culprit behind this pensions crisis

Jackie Ashley
Thursday December 19, 2002
The Guardian

Let no one say New Labour doesn't represent the nation. When it comes to the
great national issue of pensions it has dithered, delayed, tried not to
think or talk about such a complicated subject - and at last produced an
embarrassed, apologetic cough of warning. And in all of that, the government
mirrors millions of young and middle-aged voters. We have all been too late.
There is not a pensions crisis because of ministerial failure. There is a
pensions crisis because of the way we, the people, have lived.

Yes, the Treasury swiped more than £5bn from the pensions industry in one of
the original stealth taxes. Yes, it could compel employers to do more. Yes,
its maze of extra benefits rather than a straightforward increase in the
state pension was a clever-dick trick too far. But really, the worst thing
you can say of the government is that it has been far too slow to face up to
the painful reality of our pensions gap. Is it the fault of ministers that
the markets, not just here but round the world, are falling? No. Is it their
fault that some pensions companies turn out to be far less shrewdly run than
everyone thought? No. Or that we are living much longer, healthier lives? Of
course not.

Certainly, they cannot be held responsible for what is at the heart of our
problem, which is the spend-now, pay-later nature of our maniacally
consumerist culture. What has really happened is that millions of us have -
literally - spent our middle years rather than saving because, well, it's
been almost irresistible.

I hold my hand up - not because mine is an interesting story, but because it
is typical of private sector employment. Like many people in their 40s,
instead of working for a single company, quietly amassing my pension, I have
moved from job to job. Now I have a little blob of pension there, a
half-forgotten dribble of something here and that insultingly small puddle
of money, which is really a reminder of that job I should never have taken
in the first place. Worst of all, there are the blanks - the freelance years
when I really should have saved but never quite got round to it.

There was always a reason why, so many better things to do: extending the
kitchen, going on holiday, buying new gadgets and clothes, upgrading the
car. The only things we in modern Britain seem to be brilliant at are
marketing and spending. Our weekends have turned into mass celebrations of
shopping. Yet the only time we get bombarded with letters from the world of
finance is when they are trying to persuade us to borrow even more: to take
out another loan or sign up for another credit card.

The children of the long consumer boom, we expected, as of right, the latest
model and the sweet taste of novelty. Another country might have been more
austere, more careful. Not us.

For a start, as the house price boom roared on we looked around at our
overpriced brick walls and thought, "this will be my pension". Later on, as
the first bad news trickled in from pension companies, many of us said to
ourselves: "Well, no point in throwing more money at them." And if we ran
out of plausible reasons to keep spending, we could always call ourselves
patriotic - are we not constantly told that the economy is kept moving by
consumers?

As we spent, so we kept an unrealistically rosy view of retirement. Our
grandparents really did work until they dropped; most died within a few
years of retirement, as the founders of the welfare state assumed and
calculated for. Then the first wave of the consumer-boomers, if they managed
to avoid heart attacks and survived cancers, could indeed enjoy a prosperous
retirement, based on constantly rising stock markets and property prices.

But now we realise it was only their good luck. A long and healthy
retirement is not, regrettably, a human right. To me, the simplest way of
understanding the argument is to put it in the context of a single lifetime.
If we expect to stay in education up to our early 20s, as the expansion of
universities suggests, and then to retire at 60 and live for another 20-25
years, then simple maths shows that we are only working for half our lives,
at the absolute maximum. Every week spent in the office, or driving the cab
or at the check-out, has to fund another week when you are not working. You
have to be lucky, or very hard-working and productive, or a great saver, to
make those sums add up.

What's more, people's life expectancy is going to carry on rising, according
to the scientists. Over the course of the last century, the lifespan of a
typical British woman rose from 49 in 1901 to 80 in 2000. Jim Oeppen, from
Cambridge University, predicts that centenarians will be "commonplace"
within the lifetime of this generation, which means that even working until
the age of 70 won't be enough.

A couple of prosperous decades, with holidays, at the end of the working
life, looks unlikely. To any previous generation on the planet, that would
have been a statement of the obvious. To this consumer generation, it sounds
harsh. But the "pensions crisis" is not some anonymous, out-there evil that
has unexpectedly hit us. It is just another way of describing how we live
and consume, day and daily.

So the government is absolutely right to point out that there are only two
real answers - to save more or to work longer. The people already on
lifeboats are, for once, those many people in the public sector whose
pension deals remain pretty good - including, of course, MPs themselves -
plus the super-rich. For the rest of us, that choice is unavoidable.

Are ministers also right to shrink from forcing us to save more or work
longer? Again, probably they are. People are understandably suspicious of
the pensions industry at the moment. The long stock market boom was just
that, not a new economic world. Forcing voters to punt when they are jittery
about the whole game is terrible politics.

All Andrew Smith has really done this week is to warn us. In his rather
bland way, he has tried to shock us. He has got the message "panic, please"
on to the front pages and to the top of the news bulletins. I for one will
do so. The government can and should help the truly poor, who cannot provide
for their own retirements. We expect a Labour government to do it
generously. It can and should curb the rip-off merchants and the greedy at
the top of the pile. But it cannot and should not absolve many of the rest
of us for the way we have lived our adult lives, hopping from job to job,
consuming quickly. Our national motto in these past few decades could have
been: "Might as well enjoy it now - you could be dead tomorrow." The trouble
is, we won't be.