The government’s pension proposals in the March 2014 budget came as no surprise. Easier access to cash for workers with personal pensions or money-purchase pension pots is simply an invitation to spend the money to prop up current consumption, mostly of imports. At the same time our production capacity continues to decline. Are we, as the government would like, a hand-to-mouth people without thought for the future?
Instead of consuming overpriced imports we could put production first to rebuild Britain. We have the world’s second highest level of accumulated pension assets – £2 trillion, mostly held in collective final-salary pension schemes, not in the headline-grabbing personal pensions. We also have over a million workers toiling beyond age 65 and more than 900,000 young people between 18 and 23 unemployed, with many other workers of all ages part-time underemployed. That’s not economically efficient, but it is politically repressive.
It’s seemingly unconnected, but keep an eye on the appointment of Nemat Shafik as Deputy Governor of the Bank of England the day before the budget. As a Deputy Managing Director of the IMF fresh from the Greek campaign, her remit is to prepare markets for the unwinding of the £375 billion of quantitative easing currently sitting on the Bank of England balance sheet.
What this IMF stooge in the Bank of England will attempt to do under the guise of “regulatory prudence” will be to lock our final-salary pension assets into non-performing government debt at those very same rates that Osborne says represent such poor value to personal-pension savers.
Many with personal pensions also have final salary pensions. So we are all potentially exposed to the same IMF trick: they will to set up a mechanism to dump useless debt onto our pension funds at top prices that will then plummet, causing a pensions failure.
To oppose and prevent this we should be demanding a massive hike in the state pension payable at age 60 for both men and women. We should also recognise there is absolutely no need to pre-fund pensions with vast sums of accumulated capital. This would immediately free up our £2 trillion to rebuild and employ our youth.
This in turn would allow our pensions capital accumulated from our past labour to be used to rebuild for our future labour, instead of allowing it to be deployed for stock exchange speculation or to back non-performing government debt or to be squandered on imports from the euro prison camp.
Instead, with increased productive capacity, we could openly trade at best rates throughout the world while easily paying out high pensions to our elderly from the immediate proceeds of our labour. This is known as planning. ■