Raising the pension age will just turn 69-year-olds into the "undeserving poor"

The Institute of Directors is wrong to call for raising the pension age; it's not a magic money tree

Increasing the state pension age to pay for better pensions is a popular policy on the right. The Institute of Directors (pdf) are the latest to call for a rapid increase beyond 70.

It is easy to see the attraction. If you reduce the number of pensioners, then you can increase what each one gets from the state without putting up the pensions bill. Both employers and employees can contribute less to a pension if it is supporting fewer retirement years.

Increasing the pension age has become a magic money tree for pensions wonks as by definition they have no interest in the income needs of those yet to retire.

But while we cannot ignore the challenge of increased longevity, every increase in the pension age redistributes money from poor pensioners with shorter life expectancies to those from professional backgrounds who live longer.

And while longevity has increased for all social groups, the gap between rich and poor is growing. As the ONS say in just four years:

The gap between the health areas with the highest and lowest life expectancies at birth increased over the period from 9.8 to 11.3 years for males and from 8.2 to 10.1 years for females. At age 65, the gap increased from 6.7 to 8.5 years for men and from 6.3 to 8.3 years for women.

If you are only going to live to 75, you lose a much bigger proportion of your pension with an increase in the state pension to 70 than a centenarian will do. MPs who get on the Jubilee line at Westminster can see life expectancy drop by one year for each stop to Canning Town.

The other big problem with this policy is that it assumes that the pension losers in their late 60s can continue to work. Of course, many would welcome the opportunity to extend their working lives – and the coalition was right to abolish the statutory retirement age – but what looks attractive to knowledge workers with interesting jobs may simply not be an option, let alone a choice, for the less skilled and manual workers with dull or heavy jobs.

The differential state pension ages for men and women means that the poorest men who cannot work in their early 60s at the moment can at least claim means tested pensioner benefits before the state pension age as EU law does not allow age discrimination in benefits.

But with womens’ state pension age rapidly catching up with mens’ this loophole is closing. Soon we will have a situation where someone who is 66 will be a member of the deserving poor because they will be seen as pensioners, while 65 year olds  will still be among the work-shy scrounger unemployed category of the undeserving poor. They may be tired, worn-out and not very fit, but that will not be enough to satisfy ATOS that they cannot work.

Yet when the TUC did a detailed breakdown of the labour market position of 64 year olds before the recession we found that more than half of 64 year old men were economically inactive – some through choice, but doubtless many would prefer to be working.

Longevity increases inevitably bring change, but rapid increases in the state pension age are extremely unprogressive. Even a more gradual increase requires action to reduce health inequalities and to provide more flexible routes to retirement that end the cliff-edge between full-time work and full-time retirement. Yet employer groups were mostly opposed to scrapping the mandatory retirement age, and with continuing high unemployment, there is little pressure for creative thinking from employers about keeping older people in work.

An elderly man hoes a field in Havana: is Cuba the Institute of Directors' dream for Britain?

Nigel Stanley is the head of communications at the TUC. He blogs at ToUChstone.

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Roy Hattersley: Labour is far closer to extinction now than in the 1980s

 If the takeover of the party by the far-left succeeds there will be no opportunity to rescue it from the wilder shores of socialism, says the former deputy leader.

The comparison with the Eighties is irresistible but misconceived. Labour is far closer to extinction as a major party than it was 35 years ago. That is not because Jeremy Corbyn is incapable of leading the party to victory — although he is. Nor is it because his supporters threaten the political assassination of anyone who says so — although they do. It is because, for the first time in its history, Labour is in real danger of a permanent domination by the unrepresentative and unelectable left.

All the other regular crises in the party’s history — German rearmament, nuclear disarmament, the defection of the Gang of Four to found the SPD — were resolved by mistakes being rectified, resolutions reversed and Labour resuming its place in the mainstream of British politics. Nor was there any genuine risk that the infiltrators from the far left would play a decisive part in national policy making. The Militant Tendency controlled municipal politics in Liverpool and attempted, with mixed success, to unseat vulnerable mainstream MP’s. But there was no possibility of them subverting the whole party. Now the far left operating through Momentum  aspires to make a decisive, and irreversible shift in Labour’s core ideology by initiating a purge of mainstream Labour MPs and a cull of headquarters office staff, reducing the part that the parliamentary party plays in choosing the leader and making the election manifesto the preserve of the annual conference. If the putsch — described by its instigators as an extension of party democracy — succeeds, there will be no opportunity for a latter day Neil Kinnock to rescue Labour from the wilder shores of socialism and the odds on its survival lengthen.

The crisis could have been averted. The parliamentary party  with the exception of a handful of residual Blairites  is ready for some sort of compromise. That is why, three weeks ago, it gave its overwhelming support to the proposal that the shadow cabinet should be elected by Labour MPs rather than chosen by the leader. The change was intended to allow an honourable return to the front bench for the shadow ministers who resigned in the spring. As a move towards unity, it is no more than papering over the cracks but better that than gaping fractures. Although Corbyn had neither the sense nor the grace immediately to accept the gesture of conciliation, the choice between an uneasy peace and continued guerrilla warfare still lies with him. If — as his victory speech suggests — he regards last Saturday’s victory as a mandate to impose his sectarian will on the party, the battle is likely end with mutual self-destruction.

Even if Jeremy Corbin succeeds in his attempts to create a permanent far-left hegemony, the Labour Party is unlikely to split as it did 30 years ago . The fate of the SDP — absorption into a Liberal Party which kept the Tory-led coalition in office or defiant independence that ended in the ignominy of polling fewer by-election votes than the Monster Raving Loony Party — has dampened enthusiasm for a breakaway movement. Nor are there charismatic potential leaders who stand ready to lead their followers into battle in the way that Roy Jenkins and David Owen (the Fidel Castro and Che Guevara of social democracy) marched a dozen Labour MPs into the valley of political death. But a futile attempt to form a new party would at least imply the hope of some sort ofresurrection. The more likely outcome would be the product of pure despair — the parliamentary Labour party would not divide and instead would begin slowly to disintegrate.

If the worst happens some Labour MPs will suddenly discover previously undetected virtues in Corbyn and Corbynism and line up behind him. Others will grow weary of being abused by local extremists and fade away. Contrary to public opinion, most MPs could earn more from less demanding jobs outside parliament. The politically dedicated, determined to be candidates in the next election, will accept the challenge of reselection. More will succeed than fail, but the harm to the party’s reputation will be immense.

One feature of the 1980 desertion will certainly be replicated. When the Gang of Four defected, the damage done by the loss of glamorous leadership was more than matched by the loss of hard working membership. If Labour MPs begin to believe that the battle for reason and recovery is no longer worth fighting the disenchantment will become infectious. Jeremy Corbyn’s devotees would still turn out for the rallies. But the enthusiasm with which they would tramp the streets on rainy nights, or spend boring weekends telephoning target voters, is in doubt. Reliance on the notion that the election can be won online is the refuge of politicians who either have not identified or do not understand the floating voters.

The haemorrhage has already begun — increased by the behaviour of recently recruited Corbynites who do not seem to have heard that their hero has an olive tree outside his office door. All over the country they are bullying and filibustering their way into the control of local parties — excoriating mainstream members, manipulating the rules of debate and postponing votes until late in the evening. Of course, the men and women who oppose them could play the same game. But they are, by their nature, reasonable people and they want to lead reasonable lives. That is why they represent the sort of Labour Party with which voters can identify. 

Unfortunately, many of the Labour MPs who should have led the campaign to recreate an electable party have spent the last year either sulking or complaining. They have been anti Corbyn but pro very little. Owen Smith’s leadership campaign ended in disaster not because of the size of the incumbent’s votes but because of the challenger’s failure to set out an alternative vision of the society that socialists hope to create. Angela Eagle would have won fewer votes, but she would come closer to reassuring party members that "moderates" (a deadening description which should be abandoned) have principles and policies. A campaign that relied on nothing except the obvious truth that Jeremy Corbyn would lead Labour to defeat was doomed from the start. A majority of the party members who joined before 2015 voted for Smith. Think of how many more would have done the same had he offered them more to vote for than disapproval of his opponent.

Corbyn, and many of the Corbynites, are unmoved by the evidence that they are heading straight to defeat. That is, in part, because Corbyn himself is in what psychiatrists call “total denial.” There were times last year when he seemed to be implementing a carefully coordinated plan to alienate all the middle-of-road voters on whose support a Labour victory depends. He has proposed the unilateral abandonment of the British nuclear deterrent, refused to back Britain’s continued membership of the European Single Market and defended his historic association with apologists for terrorism — all items on the curriculum vitae of a Labour leader who might have been invented by Conservative Central Office. No political leader in British history has been so careless about his party’s prospects at the ballot box. But that is only one of the reasons why the threat of defeat will do little to halt the party's leftward gallop.

There is, within the ranks of Corbyn supporters, a substantial number of activists who — since they do not believe that parliamentary democracy can create the socialist Utopia of their dreams — regard the election of a Labour Government as an irrelevance. Indeed they believe that a prolonged period of Tory misrule will bring forward the day when a spontaneous uprising will herald the new dawn. It is near to inconceivable that Corbyn believes in such millenarian nonsense. But he appear to subscribe to the equally fatuous view that the first task is to make Labour a genuinely socialist party and that winning elections can wait until it is accomplished.

That is clearly the view of those correspondents to the New Statesman who complain about Corbyn’s critics obsession with what they call “electablity”. It is easy for their cynics to sneer about putting power before principle, but winning is a matter of principle too. Labour exists to make those changes in society which can only be achieved in power. In 2016 the fight — to quote the former Labour leader Hugh Gaitskell in 1962 — is less about saving “the party we love” than about rescuing the nation from long years of  Tory bigotry. To behave in a way which diminishes — indeed for a time extinguishes — Labour’s chance of fulfilling its historic purpose is worse than self indulgent. It is betrayal.

There are major figures in the current drama of the Labour Party whose attitude towards the prospect of government is both inexcusable and incomprehensible. Chief among them is Len McCluskey, the general secretary of Unite and a man whose every bombastic television appearance is worth thousands of votes to the Tories. The members he represents have the strongest possible vested interest in a Labour victory at the next election. Yet many of his policies and pronouncements — particularly his risibly unsuccessful attempts to bully MPs into supporting Jeremy Corbyn’s leadership — contribute to the Conservatives’ opinion poll lead and increases the danger of massive defeat at the next election turning into total destruction.

Anyone who doubts that Labour could be reduced to the status of the Liberal Democrats or the Greens — struggling for influence without even hoping for power — should be sent to canvas for the party in Scotland. But the near oblivion north of the border is not yet inevitable in the south. Recovery will take time and before Labour can begin effectively to deal with the challenges from outside the party it must struggle back into the mainstream of politics — a process which has to begin with an acceptance that Jeremy Corbyn’s first election was more than a combination of the Peasants’ Revolt and the Children’s Crusade. For many of the men and women who voted for the first time in 2015 his victory represented the end of a decade of disillusion. At first they had felt no more than disappointment at opportunities that successive Blair Governments missed — their delight in the landslide victory of 1997 fading away until it was finally extinguished on the battlefields of Iraq.

The Peak District village in which I live is home to more Labour party members than the tourists may imagine. Two of them  —  a retired bank manager and an emeritus professor of cardiac surgery — voted for Corbyn in 2015. In part they were motivated by a desire to “give socialism a chance for once.” But they also thought that they were drawing a line under the years of “the third way” and triangulation. New Labour, in which they had once devoutly believed, had come to mean private enterprise edging its way into the health service, the surreptitious extension of secondary selection and light regulation of the City of London. Jeremy Corbyn, like the Scottish National Party, has much to thank Tony Blair for.

For some people Jeremy Corbyn was, like Donald Trump and Marine LePen, a welcome alternative to the politics of the establishment. To many more he was, by the very nature of his unelectability, the antidote to the opportunism which they (wrongly) believe characterises life in Westminster. Now, a mainstream candidate for the Labour leadership will have to make clear that they are guided not by opinion polls but by a vision of a new and better society. The next leader must concentrate every nerve and sinew on winning, but they must have faith in their ability to carry the country for reasonable revolution.

Unfortunately the members of the Labour mainstream are notoriously reticent about  discussing first principles. They find talk of “the vision thing” embarrassing and believe that the task which faces them is too obvious to need justification by any “fancy theories.” Yet there is a great body of work — by the likes of TH Green, RH Tawney. Anthony Crosland and John Rawls — which set out the theory of democratic socialism and descriptions of why it is especially relevant today – Joseph E Stiglitz’s The Price of Inequality and The Spirit Level by Richard Wilkinson and Kate Pickett — abound. The recovery of reason has to begin with Chukka Umuuna explaining the virtues of equality, Yvette Cooper describing Britain’s obligations to the developing world and Dan Jarvis defining the role of the state in protecting the weak against the strong. Or any of them talking about what they stand for instead of assuming that their convictions are taken for granted. The Daily Mail might not report their speeches, but moderate party members will treat the related Fabian Society pamphlets like water in the desert.

If, as they must, the reasonable majority of Labour MPs choose to stay and fight, they have to organise — inside the parliamentary party and, more importantly in the constituencies. I have spent much recent time insisting, to sceptical friends that the occupants of the opposition back benches are as competent and committed as were members of any of the governments, or shadow governments, in which I served. But I do not even try to argue that they are as active as my contemporaries once were in reclaiming the party. Success and survival depends on the constant demonstration that reasonable radicals still have a home in the Labour Party.  

One refugee from Corbyn’s original shadow cabinet assured me that like-minded Labour MPs do occasionally meet. When I asked what they discussed, I was told that they “wait for something to turn up.” But, something will only turn up if it is prepared and promoted by the men and women who have the courage and commitment to lead Labour out of the wilderness. The journey will be long and hard and there can be no guarantee of arrival at the desired destination. But those of us who believe that Labour can still provide the best prospect of a more equal society have to begin the trek toward the promised land — and we need to set out straight away.

Roy Hattersley was deputy leader of the Labour Party from 1983 to 1992.