The pre-budget hype, radical moves on pensions for example, is simply not matched by the way you seek to gently tinker with a failing system. Many of the changes in personal taxation are delayed until 2013, although the economy could do with a genuinely redistributive boost now, and an automatic future extension of the pension age means that people will eventually be completely stuffed by the system.
Funding state pensions from current day receipts is simply not sustainable. At the moment it is a struggle and already people have to work for around 50 years to enjoy perhaps 30 on a pension that is a tiny fraction of what they earn, or even contributed. In 15 years time, according to my rough calculations, around 22% more people will be drawing pensions than today, relative to those in work. Extending the age at which you can draw a pension to match increases in life expectancy will simply not plug that hole and unless you plug the hole now it is likely to be unpluggable.
The Unofficial Green Paper contains suggestions on ways to deal with this, but the budget is just another missed opportunity. Yet again a government seems to be slowly releasing cash to engender a feel good factor just around election time rather than genuinely planning for the long term.
There are three things that you should urgently do:
- Fully review the future of all pensions
- Fully review the future of health and social care funding (not delivery as in the current NHS Bill)
- Fully review the status of social enterprise and its capacity to support the above two categories of expenditure.
Once you have done this you should be open with people about exactly what they will get for their contributions for the whole of their lives. The Green Paper carries the full list of suggestions. This is urgent and matters hugely to the '99%' many of whom do not yet realise how much. Please do not leave it much longer.
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