Queen's Speech — Debate (3rd Day)

Part of the debate – in the House of Lords at 8:57 pm on 8th December 2008.

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Photo of Lord Jones of Birmingham Lord Jones of Birmingham Crossbench 8:57 pm, 8th December 2008

My Lords, I thank the noble Lord, Lord Hunt of Chesterton, for his kind words. I also join him in saying to the new Secretary of State: it was a good start. However, perhaps I may lay two issues at his door.

First, the accent in the Pre-Budget Report was on stimulation of the consumer. However, regardless of a VAT reduction, people will not go shopping for big-ticket items when they are out of work. I hope that the Secretary of State's department will maintain a sustained emphasis on keeping people in work and on training immediately those who have to be trained in alternative employment because of inevitable redundancies

Secondly, at the start of today's debate the Secretary of State said that, when we come out of recession,

"there would have to be a rebalancing of the public finances".

The nation is in peril of experiencing long-term detriment to necessary private sector growth, because a shrunken private sector will be working valiantly to pay the extravagant and unfunded public sector pensions to which the Government committed only a few years ago, including continued commitment to a retirement age of 60 for current public sector employees. That is entirely inconsistent with the private sector having to work longer these days for no better pay and certainly less job security. It means that people will have to work longer, in part to pay for those public sector pensions in the long term. I cannot think of anything more economically or socially divisive than employees in our eventually recovering economy having to face that division.

Lastly, I say to the three parties in this House and in the other place that there is a need in the year ahead—one of the most perilous years economically for this nation since the Second World War—for all politicians to strike a better balance. Sadly, at the moment, that is more noticeable by its absence. The taxpayer is a shareholder who wants strong, profitable, dividend-distributing banks. The taxpayer is a borrower who wants interest rate cuts passed on as extra distributable income for the private individual and as cheaper money to help with the rising cost of business. The taxpayer is also a saver who wants greater reward for previous—dare I use the word—prudence. Is that difficult? You bet it is. But balancing different interests and taking very difficult decisions is what people elect Governments to do. When those different interests come together all in one person—the taxpayer—there must be a displayed use of balance. That has been conspicuous by its absence across the political divide. I hope the country gets better in the year ahead.

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Joyce Glasser
Posted on 10 Dec 2008 12:41 am (Report this annotation)

Lord Jones of Birmingham is, of course, correct about the huge and increasing gap between the ability of the public sector employees to retire for the last 10-35 years of their lives on final salary pensions and the ability of many in the private sector to be able to afford any kind of retirement.

However he is wrong when he warns that, and I quote: the shrunken private sector will be working valiantly to pay the extravagant and unfunded public sector pensions.

There is currently a piece of legislation (the Default Retirement Age) that allows employers to sack any employee aged 65 or over and deny a job, or even a job interview, to any new applicant who is over 64.5. This law was introduced by Patricia Hewitt in 2004 and implemented in 2006 along with the so-called Employment Equality Age Regulations 2006.

There are also many people under 64 who cannot find work due to their proximity to that magic age. There are thousands in their 50s, many educated, who cannot find work due to a lack of training, updated skills, and the stigma of long term unemployment on their CVs. There is no help at the Job Centre for these people. How are these people going to ever retire when they have been living on their savings for years, hoping for a job to spare them something for retirement? What about those who finally find a job but it is low paid or part time -- not allowing them to earn a living. Moreover, with all the graduates being sought after, where will the over 60s find work? In all of the more desirable or challenging jobs, there are 1,000 applications for every position.

Far from working into their 90s to fund the public sector deficit, thousands of private sector workers will be unable to work and earn a living. Instead, they will be forced into a life of illness, hunger, cold, unfulfilled dreams and dire poverty.

The National Default Retirement Age must be abolished now and tougher laws to protect all older people against ageism should be implemented. Apprenticeships and higher education grants should be made available to the over 50s and the Government must start giving priority to those over 60s without pensions to replace those lawfully retiring from the civil service.