It was almost inevitable that the right-wing think tanks would start clamouring for austerity by delivering attacks on the most vulnerable in society as soon as they felt the coronavirus made it possible to do so, and the process has now started.
The Guardian reports this morning that:
The coalition government policy that led to state pensions rising quicker than wages should be scrapped as part of an “intergenerational reciprocation” for the costs of battling Covid-19, a thinktank has said.
The Social Market Foundation (SMF) proposes that the massive economic cost of the emergency measures deployed to manage the pandemic must be shared fairly between old and young, and that some of the huge anticipated government deficit could be funded by abandoning the so-called triple lock guarantee on state pension rises.
The economic logic underpinning this demand is entirely flawed.
It assumes that there the coronavirus crisis must be paid for, when all that is missing is credit at present, as I have explained.
It assumes that payment must come from across society when many have nothing more that they can contribute.
And it assumes that there must be a squeeze on public spending because the private sector is in meltdown when the exact opposite is the case.
What is more, it assumes that making all worse off will somehow deliver inter-generational equality, which is the right-wings usual narrative of the politics of envy put into reverse. The paradox of thrift is their answer to this crisis, and will make it very many times worse.
This thinking, which exposes the simultaneous poverty of their thinking and their desire to impose poverty, has to be resisted. I hope the revived Labour Party is up to the task. If not, what is it for?
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I want to say that your blog is the main place I come to for analysis. I think your question about the Labour party is really pertinent. What Keir Starmer has been saying since being elected leader suggests that Labour won’t be up to the job. They’re poisoned by neoliberal ideology, re-occupying the mythical centre ground, and seeing themselves as nudgers of a basically fine and settled socio-economic order. Labour is finished in my view.
Labour must defend ordinary people from further assaults on their health and living standards.
The “revived” labour is dead a duck – as seen by Labour HQ to undermine Corbyn in the 2017 and 2019 general elections et al. Starmer is very quiet most of the time and is refusing to hold government to account. The leak report is damning but Starmer has known about it since he was elected leader of the party on 4th April but not a murmur from him or his office. What we got was there will be some investigation into the leak and some disciplinary action. It is not clear if that is aimed at the whistleblower or the people mentioned in the report, it could be both or just the former or the latter. i do not hold any hope he will protect the whistleblower though. So your question is what is labour for now? To prop up the neoliberal order and to make it into government when the public get fed up of the tories, but in reality nothing has changed, except the man in a suit.
I am reserving judgement as yet
Like you I am reserving judgement. I concur with the person who says your blog is a go-to resource.
Thanks
The Sun newspaper is advocating abandonment of the “triple lock” for pensions. They think pensioners on higher incomes are getting too much. Pensioner poverty has been reduced since the triple lock, but not completely. Any resumption of an increase in pensioner poverty is unacceptable and would lose Tory votes.
Unsure who is ‘running’ the guardian these days ? MI5, MI6, conservative home, one of the american alphabet groups ? But, they neglect to mention that the UK’s state pension is second lowest in the developed world.
https://www.businessforscotland.com/uk-state-pension-worst-in-developed-world-and-has-the-highest-retirement-age/?doing_wp_cron=1586858032.7890069484710693359375
This is not the first time the guardian has run a piece suggesting that pensioners are further impoverished….. and they want me to subscribe !
In fairness, they are reporting someone else’s call
It is not an editorial piece
“In fairness, [The Guardian] are reporting someone else’s call
It is not an editorial piece”
True but I don’t think they are conveying a very critical tone…… I have long thought elements of the Guardian regulars read more and more like the Daily Mail for the literate. Symptomatic of just how far to the right the Overton Window has shifted.
I wish to strongly associate myself with the comments of both Helen and Marianne about the Labour party.
As for SMF…………..why oh why does the Guardian give these idiots the time of day?
The Guardian is supposed to be the premier intellectual Left wing newspaper in our society but seems to ignore the realities of sovereign Government fiscal power? Have any of its so-called journalists read John Weeks? Bill Mitchell? Ms Kelton? A certain Mr Murphy? Warren Mosler?
Bloody Hell! It’s as if the Left don’t want to solve this problem, because (perhaps) by solving it, they’d not know quite what they’d exist for afterwards (although the answer is obvious – to preserve the answers and keep them working).
The Left are not here to feed off suffering: they are here to reduce it and maybe solve the problem.
It would be wrong to think the Guardian has a great many analytical minds when it comes to economics and in particularly actually understanding how their own country’s reserves based monetary system works and the long historical development of this system. Wrong to think this vital understanding impacts the work of the Guardian’s non-economics journalists. With the advent of the coronavirus pandemic it can very clearly be seen this lack of understanding the country’s monetary system literally creates a Death Culture! Yes it’s that serious!
You must recall there are only three such journalists, as far as I know
Well, all I can say is that you are right – I have been wrong.
But where does that leave us in this world of sadistic economic orthodoxy?
It’s like being pulled into a march of a load of flagellants – I don’t want any part of it as its stupid but also, it hurts!
The flagellants BTW are the people themselves it seems!!
Count me out. There must be a mountain top or an island somewhere where I can get away from this rubbish. Never mind isolating from Covid-19, the infection of society by Neo-liberal clap trap and sado-austerity are just as worse.
One wonders just how much pain voters are prepared to suffer under the Tories. We’re witnessing the same kind of tribalism as in the US where Trump supporters would rather see the economy tank than see another Democrat in the White House. Emotion is proving to be a much stronger influencer than rationality – which presents an almost insurmountable problem for progressives everywhere because the prime sources of communication are owned by oligarchs.
In spite of the increased exposure that MMT influenced macro-economics has been getting in the more ‘serious’ media, you know the household analogy will continue to be exploited by the right because it suits their ‘Randian’ philosophy and agenda. However competent Keir Starmer may prove to be in healing internal wounds and reaching out to a wider public, I can’t see him successfully articulating a high-profile attack to overturn this economic lie that bedevils our society and threatens the future of mankind. Can you? Maybe Anneliese Dodds will prove to have the self-confidence and knowledge to be the attack dog required to face up to well orchestrated criticism. I don’t know anything about her.
The bottom-line, both metaphorically and financially, is that the country will be subjected to a new era of austerity economics at least for the next 10 years, from which it will take a generation to recover. Unless there are public protests on the streets – but, even then, you know the military will be called up to oppress them with full DM headline approval. In spite of all the optimistic talk about building a more caring world, putting people before profit, etc., this pandemic will be used ruthlessly to further shore up life & planet-threatening Neo-liberal lies. I’m sorry but I just don’t see any way out.
“The economic logic underpinning this demand is entirely flawed.“
True, but you could take “economic” out of it and it still would be true.
The cost of this crisis is being paid by the older generations with their lives!
“intergenerational reciprocation” if it means anything has to mean :
We will educate you in your childhood and youth, then your will work, to your best, during your life to help build a stronger country, and your country will take care of you in your old age.
This contract has already been broken by the negligent treatment of the old.
(Oh and I agree with Helen’s comments re your blog. Frankly I think you are the most important blogger in the UK at the moment. Many people can see patterns old and new and try to apply past to the now. However, often in times of change or crisis, that just provides fools with complacency and comfort, and no solutions. Very few people can adapt to the times intime for the times. I think in this realm you are on top of your game. – So glad you got over the virus!)
You’re right Ken
Sort out the estimated £193bn lost to fraud (2019) across both public and private sector and one might not have to squeeze either sector so hard.
Right wing propaganda organs like the SMF must think all pensioners are filthy rich with loads of cash and assets. Maybe some are.
A report for the Commons showed that: “According to an OECD analysis published in 2017, the UK has an overall net replacement rate of 29.0% from mandatory pensions for an average earner (well below the OECD average of 62.9% and the EU average of 70.6%). When voluntary provision (mainly workplace pensions) is included as well, the UK’s net replacement rate rises to 62.2%, while the OECD and EU averages rise to 69.1% and 73.8% respectively.” and “The UK devotes a smaller percentage of its GDP to state pensions and pensioner benefits than most other advanced economies.” (https://commonslibrary.parliament.uk/research-briefings/sn00290/)
In 2017 the Guardian found that “One in three UK retirees will have to rely solely on state pension” (https://www.theguardian.com/money/2017/oct/21/uk-retirees-state-pension-financial-future) while in the same year the Independent reported that “The number of single pensioners who rely completely on the State for financial support has increased by 26% to 1.1 million over the last five years”.
The move from Final Salary pensions, since many companies prefer to pay dividends to executives and shareholders rather than give decent pensions to employees, will also mean that a great many will find they have hardly enough to live on when they retire.
While it is true that pensions have increased faster than earnings, which seems to be an argument for reducing pension increases, another way of looking at it is to say that earnings have stagnated thanks to to neoliberal policies over the past 4 decades. That is surely a scandal.
Finally, the SMF seem to think that pensioners should, literally, pay for being well looked-after during the current crisis: ” ‘It would also demonstrate reciprocity from a group whose wellbeing was, rightly, prioritised during the lockdown phase of the crisis,’ the SMF said.”
Thanks Graham
The gaslighting has begun. This has just been posted on Twitter. Apparently this Tufton St thinktank has Alastair Darling on the board?
http://www.smf.co.uk/publications/intergenerational-fairness-coronavirus/
It would not surprise me…
It has numerous political embarrassments on its board and team.
I haven’t yet downloaded the smf report, but read the article on their site introducing it. It made my blood boil! The last two ‘Key Points’ especially! Directly claiming that the expenses of lockdown and healthcare were due to protecting older people therefore they should be penalised with the loss of the triple lock!
Not one word – not one! – about the dithering idiocy of this damnable government, or its insane ‘herd immunity’ being the cause of the scale of this genocide!
The more I think about it, the more (as one of your regular correspondents has pointed out recently) I realise that a lot of the reaction (and un-reaction – which is worse) to these times is based on feelings , not facts.
For example, i tend to see the Government auto finance as depicted by John F Weeks as fact – scientific even, in the way it works. All I see is the science of sovereignty.
But the emotional response to the supposed economic bailout is based on one of over-emotion – that there has to be some sort of reckoning, or paying back even if all we are doing is trying to help ourselves out of a crisis.
It’s getting really hard to tolerate this level of stupidity that like Covid-19, does not discriminate between classes of people. All seem to be infected with it. Such fatalism – like another correspondent said – a death cult abounds.
The age of enlightenment seems to be well and truly dead folks.
OK, so these people are saying that working age people are paying the price of the coronavirus lockdown, so pensioners should take a share of the burden by getting smaller pension increases in future.
How is that fair to anyone when the working age people suffering now will end up taking a second hit when they eventually retire and get a smaller pension than they would have got otherwise?
It looks to me like a cynical attempt to leave everyone worse off instead of trying to limit the damage.