The 2010 Emergency Budget thread

[Twiglet]

The problem with that argument is that the private sector has lost, what a million jobs? out of how many 20 million maybe? I think the loss in gdp was about 10% for a year so maybe the private sector lost 1 in 10 jobs last year at the height of the recession the average private sector pay deal was 2%.

 

The Civil Service has lost 20% of its jobs in the last 5 years, where I work our pay deal has been average 1% for the last 3 years and across the public

 

And the public sector is about to lose another 25% of its jobs in the next four years - equating to around 1.75 million positions. Compare that to the private sector.

 

Further to my earlier post - I was 'annoyed' about the pay freeze and pensions, but with a 50% chance of losing my job, and if not, losing that number of my colleagues, I've got bigger things to worry about

[Rupert_Baehr]

...Do you have a better plan Rupert?

 

Yes I do.

 

If you want to continue with a state-funded pension, then the money paid by taxpayers into a pension fund should stay in the pension fund. - If you need (and you probably will need) funding for medical care, funding for unemployment insurance (and that's what it should be seen as), funding for care in old age and funding for other welfare programmes then raise taxes to fund them. Let the money from those taxes go into the appropriate funds and stay there. Let the taxpayer know what (s) he is paying for each service (s)he is getting.

 

The taxpayer may decide not to fund certain programmes. - He who pays the piper should be allowed to call the tune.

 

UK pensions are lower than those in many other countries; perhaps in part because successive governments have robbed the pension funds (and perhaps because UK tax payers don't pay very much for their welfare programmes.)

 

In the future, people are going to have to learn to save some money for their old age - just as they had to do before the Welfare state (and as they should have been doing since the Welfare state was founded.)

 

Your parents provide for you from birth to adulthood. When they stop providing for you, they may have to help support their parents. Everybody's time comes round. But what happens to the people who didn't have children and have nobody to look after them in their old age?

 

Easy! - They save the money they didn't have to spend bringing up children and use it to pay for care later.

 

My grandmother was not particularly well-educated; she certainly wasn't a top-flight economist, but I suspect she could've taught a few economists valuable lessons.

 

When I was a little boy, she said to me:

 

"One day, when you get older you will go to work to support yourself. When you get your first pay-packet, divide it into 3 equal piles. Use one pile to live on. Put another pile into savings and you can p*ss the 3rd pile up against the wall."

 

2nd piece of advice:

 

"If you want something and you are prepared to pay the price it's offered for sale and you have the money - buy it.

If you want something and you have the money to pay for it but the price is too high, leave it where it is - unless you can get the seller to reduce the price to the amount you are prepared to pay.

If you want something, then even if it's a bargain, if you don't have the money to pay for it do without until you do have the money.

 

That was sound advice. I tried to stick to it. I did take out various mortgages (not a lot of choice, there) but for lesser purchases if I don't have the money (and I won't have it with a month or two) I wait.

[Wildcat]

Yes I do.

 

If you want to continue with a state-funded pension, then the money paid by taxpayers into a pension fund should stay in the pension fund. - If you need (and you probably will need) funding for medical care, funding for unemployment insurance (and that's what it should be seen as), funding for care in old age and funding for other welfare programmes then raise taxes to fund them. Let the money from those taxes go into the appropriate funds and stay there. Let the taxpayer know what (s) he is paying for each service (s)he is getting.

 

Basically you are talking about ring fencing funds. No pension public or private works that way, it is used to invest and generate money. Your proposal would remove money from the economy, reduce the money available for investment and reduce returns on those contributions. With respect I can't see any merit at all in your proposal.

[Rupert_Baehr]

Taking money that people thought they were paying to the government so that the government would have the funds to provide them with pensions at a later date and spending it on other government projects isn't 'Investing' the money, it's misusing it.

 

There is no reason why ring-fenced funds should not be invested and investing those monies does not mean they no longer belong to the fund. There are plenty of pension funds (the private funds) which are invested but were not pillaged by the government (not until Gordie robbed them in 1997.)

 

Brown robbed those who saved in private schemes of over £100 Billion. His government (along with previous governments) have robbed the state scheme, too.

 

The present scheme is a Ponzi scheme. - Illegal were you or I to do it, but the government make (or rather ignore) the rules as it suits them.

 

If you held money in accounts on behalf of your clients and you used that money for other purposes, you would stand a pretty good chance of being prosecuted for 'stealing a balance'. Again, the government make the rules and the government ignores them.

[andyofborg]

Taking money that people thought they were paying to the government so that the government would have the funds to provide them with pensions at a later date and spending it on other government projects isn't 'Investing' the money, it's misusing it.

 

There is no reason why ring-fenced funds should not be invested and investing those monies does not mean they no longer belong to the fund. There are plenty of pension funds (the private funds) which are invested but were not pillaged by the government (not until Gordie robbed them in 1997.)

 

Brown robbed those who saved in private schemes of over £100 Billion. His government (along with previous governments) have robbed the state scheme, too.

 

The present scheme is a Ponzi scheme. - Illegal were you or I to do it, but the government make (or rather ignore) the rules as it suits them.

 

If you held money in accounts on behalf of your clients and you used that money for other purposes, you would stand a pretty good chance of being prosecuted for 'stealing a balance'. Again, the government make the rules and the government ignores them.

 

The state pension scheme was always a "pay as you go" scheme with current contributions being used to pay current liabilities.

 

The original founders of the scheme probably didn't envisage the situation we have now, and certainly chose the pension age with the intention that most people would get no more than a few years pension and that many probably wouldn't get any.

 

Governments for the last 30-40years have been aware that increasing longevity was going to be a problem but ducked the issue. To its credit the previous government did to actually try and take steps to address the problem but as always chickened out of actually doing anything constructive and passed the problem onto succeeding governments.

 

Whether or not you agree with what has been done, the coalition is the first to actually do something about this. What they have done is in line with the cross party consensus and they have given most people sufficient time to amend their pension planning.

 

Gordon Brown didn't actually take any money from any pension fund just removed a tax break from private funds.

 

The other thing that no one has mentioned about private funds was that there was a change in accounting practice which meant that any deficit in a company fund had to be shown on the balance sheet. While this was good in that it focussed the company management on plans to plug the deficit, it was bad in that it affected the corporate bottom line, which had an impact on share prices, director bonus etc. This coupled with the rather lacklustre investment returns over the last 10years has led to the closure of many large company schemes.

 

The other thing is that the National Insurance contribution which was only supposed to establish the right to the state pension, NHS care and other welfare state benefits has become part of the general taxation mechanism. For the last 30 year, successive governments have made bold pledges not to increase the basic rate of income tax. Instead what they have done instead is increase the National Insurance contribution instead.

[Wildcat]

Taking money that people thought they were paying to the government so that the government would have the funds to provide them with pensions at a later date and spending it on other government projects isn't 'Investing' the money, it's misusing it.

 

There is no reason why ring-fenced funds should not be invested and investing those monies does not mean they no longer belong to the fund. There are plenty of pension funds (the private funds) which are invested but were not pillaged by the government (not until Gordie robbed them in 1997.)

 

Brown robbed those who saved in private schemes of over £100 Billion. His government (along with previous governments) have robbed the state scheme, too.

 

The present scheme is a Ponzi scheme. - Illegal were you or I to do it, but the government make (or rather ignore) the rules as it suits them.

 

If you held money in accounts on behalf of your clients and you used that money for other purposes, you would stand a pretty good chance of being prosecuted for 'stealing a balance'. Again, the government make the rules and the government ignores them.

 

The fact public sector pension contributions go in to public sector spending is only misusing it if it spent badly.

 

Comparing it to a Ponzi scheme is ridiculous, as is your suggestion it is illegal. Ponzi schemes are set up to fail. As the OBR report shows long term public sector pensions will cost less than they do today.

 

You are also wrong about private sector schemes, if you were right then the pension administrators that took pension holidays would be in prison.

[Wildcat]

Governments for the last 30-40years have been aware that increasing longevity was going to be a problem but ducked the issue. To its credit the previous government did to actually try and take steps to address the problem but as always chickened out of actually doing anything constructive and passed the problem onto succeeding governments.

 

Increasing longevity has already been factored in to schemes and did not concern anyone when they were taking pension holidays.

[andyofborg]

Increasing longevity has already been factored in to schemes and did not concern anyone when they were taking pension holidays.

 

the government hasn't taken a pension holiday though, it can't as there are no separate assets.

 

private companies did take pension holidays and at the time they felt it was the right thing to do as investment returns were high. in retrospect, this has proved to be a big mistake. unfortunately, we have to deal with the problem based on where we are not where we would like to be

[Wildcat]

the government hasn't taken a pension holiday though, it can't as there are no separate assets.

 

private companies did take pension holidays and at the time they felt it was the right thing to do as investment returns were high. in retrospect, this has proved to be a big mistake. unfortunately, we have to deal with the problem based on where we are not where we would like to be

 

The problem is that where we are now is a distorted market. Making plans based on the situation now, doesn't benefit anyone except those wanting to screw the poor for every penny they have.

 

W ehave gone from a situation 1o years ago where contributions were higher than dividends and pension funds were taking holidays, and now investment returns are lower they want to cut back on pension provision. Why is it the poor lose out at both extremes? What we need is sensible decisions made for our long term futures, not short term reactions to every crisis where we get ripped off regardless.

[andyofborg]

doesn't benefit anyone except those wanting to screw the poor for every penny they have.

 

unfortunately, that's always been the case