From the acting editor...
Sometimes a single headline says a great deal. Take this one from The Times on Tuesday: “Jeremy Hunt told to stop targeting golf and raise private pension age instead”. The chancellor told retired over-50s that they should get back to work instead of spending their time going to the golf course. Now the Resolution Foundation think-tank is (correctly) telling him that this isn’t going to happen, but suggesting he should raise the private pension age faster and cap tax-free lump sums to stop others from following them out of the workforce.
There are any number of bad ideas on display here, starting with the belief that the government has any role dictating to people that they should be working rather than playing golf or on the ski slopes (see page 20), or however they want to spend their time. For a party that claims to be devoted to personal liberty, the Conservatives have been getting increasingly keen on telling us what to do for many years and the taste of untrammelled power during the pandemic has worsened that tendency.
Then there’s the suggestion that increasing the private pension age is a reasonable response. Most of us began paying into private pensions on the basis that we could withdraw our benefits at age 55. That commitment has already been broken by the decision to lift the minimum age to 57 in step with the state pension age. This is the serious flaw with all forms of saving where the government can easily change the rules on what you get or when you can get it. While the chance to top up your state-pension entitlement by filling in gaps in your national insurance is worth considering (see page 25), we have to weigh how far we are from retirement and how the benefits are likely to change by then. I certainly don’t think the triple lock will exist by the time I draw a state pension.
Fix the real flaws
Beyond that, however, the underlying error is that the government can solve problems by clumsy coercion of the people to whom it answers. The British economy is performing poorly. The focus on keeping would-be retirees at their desks suggests the government thinks this can be fixed by throwing more workers at the problem (with the notable exception of public services, where the goal seems to do more with fewer staff who are paid less in real terms). Yet one of the UK’s fundamental flaws is poor productivity and that cannot be solved by increasing the number of resentful employees who would rather be elsewhere.
If the government wants to facilitate a better economy, it needs to focus on this. Investing in education and skills (as an aside, while I am no fan of Sadiq Khan, I welcome his experiment of spending £130m to provide meals for primaryschool children in London for a year
– there is evidence that better nutrition improves outcomes everywhere from schools to hospitals to prisons). Investing to fix the UK’s crumbling and inadequate infrastructure. A house-building strategy that finds the gap between “build nothing” and “allow developers to cover the green belt and flood plains with poorly built car-centric estates with no services”. Facing down the headbangers and fixing the country’s most important trading relationship (see page 10). Britain is not uniquely troubled and the market is arguably cheap, but it is strikingly poorly run, in part because the government doesn’t seem to understand what lies within its remit and where it has no place.
“The problem is poor productivity and that can’t be fixed by more resentful employees”