'There's a simple way Rachel Reeves could increase state pension, be fairer to all and save money,' says Nigel Nelson
PA
There’s a bit of old England down our way. Every Sunday a rag and bone man comes along on a horse-drawn cart shouting something incomprehensible and ringing a handbell to alert those of us unable to translate.
Both man and horse are very ancient so I imagine one or the other will need to retire soon and another great British tradition will be lost. I shall be sorry to see them go.
They’re quite picky about what they pick up; bits of old wood and metal are fine while a redundant Nespresso coffee machine, that iconic symbol of modern, middle-class living, isn’t.
But old England came back with a bang this week if recent attitudes are anything to go by. It seems many people want to return to it.
There has been much grumbling over Labour awarding 5.5 per cent pay rises to teachers and nurses, and train drivers getting 14 per cent over three years really got a few goats.
The complaint is that as drivers already get lots of money in wages of £60,000 a year, they should not have any more - which sounds like something a Victorian mill owner might say before shovelling another 10-year-old under a loom.
Labour has been criticised for offering train drivers a pay rise of 14 per cent over three years
PABut if that is the kind of convoluted reasoning now doing the rounds, why stop there? Denise Coates, boss of online gambling firm Bet365, paid herself £221million last year, up £7million on the year before. Is that also too much?
According to the High Pay Centre, median pay for CEOs in the UK’s 100 largest listed firms is now £4.19million. You could buy yourself 70 train drivers for that.
As time travel to a bygone age seems the new fashion, let’s look at their pay 40 years ago. It was 20 times the average earnings then. That rose to 50 times 20 years ago, 79 times in 2020, and is now 109 times. You can’t blame Keir Starmer or the unions for that. Fat cats pay themselves these huge sums simply because they can.
Had Jeremy Corbyn become PM he would have insisted that company bosses with government contracts could earn no more than 20 times that of their lowest paid worker.
That’s straight out of today's pay moaners playbook, and it might have encouraged Denise to knock a few noughts off her salary, too. I'm surprised more people didn’t vote for old Corbs if that’s what they wanted.
The other gripe gaining traction is that Chancellor Rachel Reeves would have no need to scrap pensioners’ winter fuel allowances if she’d not given in to worker pay demands. But I’m not entirely convinced shortchanging one group over another would lead to peace and harmony.
It would be a little like mothballing our Trident fleet to save cash and hiring a few more Grenadier Guards for the defence of the Realm - which would be very old England indeed.
Had Ms Reeves not needed the £1.5billion saving from winter fuel urgently, she might have had time to look at reforming the way we treat our elderly because the system is in dire need of it. Nothing is more rooted in England’s past than the way we divvy out dosh to older people.
In the 1950s average life expectancy for men was 69, which meant the government only had to stump up four years' worth of pensions. Now it’s more like 20 - 30 years. And the ageing population is growing.
The new state pension of £11,500 a year is not much to live on nowadays, not when you compare it with the £24,000 plus pensioners in Spain, Switzerland and Belgium get.
And there are old England anomalies in the system. On your 80th birthday the weekly pension will increase by 25p. Yes, that’s right. A ridiculous, measly and insulting 25p. Save up for a month and you’ll be able to buy a second class stamp and get 15p in change.
This age allowance was introduced by PM Ted Heath in 1971 when pensions were £6 a week and 25p meant something. But why on earth has it not been either uprated or scrapped since then? Even this paltry sum costs taxpayers £40million a year.
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Chucking money at people when they reach 60 - free prescriptions, some discounted travel - also seems barmy when they are likely to be earning the same as they were at 59. And, like the £300 winter fuel allowance, these handouts are not taxable.
If you’re over 66 you will not pay employee National Insurance either. Yet, according to the Institute for Fiscal Studies, a third of men and one in four women above this age still do at least some paid work.
So here’s an idea, Rachel. Ditch the lot and roll all the money saved into providing a decent basic state pension. Poorer pensioners who rely on it will be quids in, and the extra income tax from richer ones means you’ll still get loads of the money back.
This new system would be fairer to all and herald a new age of relative prosperity for many.
Old England is a great place to visit when the National Trust or English Heritage are hosting. But it’s not somewhere you want to live.