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Monday 4 July 2011
Letters: Public and private pensions
How UK governments scuppered our pensions
Nowhere can the law of unintended consequences be more clearly shown than in the recent pensions debacles (public and private).
Thatcherism decreed that large swathes of public-sector activity should henceforth be outsourced, removing large numbers of workers with modest actuarial and pension expectations from the public-sector pension schemes.
At the same time, the managers responsible for those outsourced operations claimed their job was now more complicated, more private-sector like, so they deserved salary rises which increased their final salary, increasing the future burden on the pension schemes.
Cuts to many public-sector budgets were in large part delivered the easy way, by giving early retirement to those affected, yet again increasing the future burden on pension schemes.
At the same time as they were boosting future pension liabilities, cash-strapped councils (with the open encouragement of government), stopped paying their share into pension funds, sometimes for many years.
Enter Gordon Brown, with his raid on private pensions and insistence that pension liabilities, which inevitably fluctuate with stock markets, should be shown on the company books. Not surprisingly, the reaction of companies (many of whom had stopped paying into their schemes in the good times) was to start winding down their schemes to try to mitigate the damage caused by Brown.
Suddenly, average private-sector pensions went into a tailspin, generating resentment of the remaining public-sector workers still in their underfunded pension schemes.
And lo, a perfect storm is created.
To hear some commentators describe it, I should, as a public-sector pensioner be thoroughly ashamed of being a parasite. I am in the fortunate position of having a "gold-plated" public-sector pension in exchange for the 30 years I spent in the classroom. This £10,000 a year means that I do not need to claim any other benefits to supplement my state pension.
Both these generous and charitable state handouts are completely spent, month after month. Every last penny. A good quarter of the money goes straight back to the public pot in the form of income tax, council tax, VAT, TV licence, vehicle licence, etc. And the rest of the money?
Well, not a single penny gets saved or invested abroad and none of it goes on foreign luxury items. No, I spend all of my remaining funds with British companies like Tesco, Southern Electric, Anglian Water and those other suppliers of basic needs that are also employers of British workers.
Therefore, as long as the Government is trying to generate economic growth by monetary expansion, I cannot see myself as a leech on the British taxpayer. I am merely a conduit through which HMG efficiently channels taxpayers' (mine and others') money back into the national economy.
Although I am pleased to read that the snivelling Tory-led Government is allowing special dispensation to the armed services, firefighters and the police regarding changes in pension rights, I am dreadfully disappointed that the ambulance service, yet again, is not being included. I am sure if you should ask anyone who has been treated by ambulance personnel and driven to hospital in an emergency situation whether or not they consider them to be an emergency service, their answers would be 100 per cent yes.
However, successive governments have been afraid of including the service under the "emergency" umbrella because it might cost a bit more to give them parity with the others.
In a hugely insulting interview, not so many years ago, Kenneth Clark famously called these highly motivated, highly trained, highly skilled, dedicated medics just "professional drivers". These amazing people save hundreds of lives by their fast, efficient actions but are rated as second-class when compared to the other services.
It's time this was put right and parity awarded so that they, too, can reap a few benefits after dedicating their working lives to saving lives. They witness untold horrors in all kinds of traumatic situations, especially traffic accidents, where they sometimes literally have to pick up the human pieces.
Patricia M Farrington.
Isle of Islay, Argyll
I know of three young teachers who have opted out of the present teachers' pension scheme (TPS) because their student debts and their starting salary have meant that they cannot afford to pay into it. This has serious implications. Many already see teaching as a transient career because it provides insufficient salary and benefits to stay longer. Higher contribution rates will discourage members from remaining in the pension scheme and are likely to deter new members from joining it.
As fewer teachers pay into the scheme, there will be a shortfall in paying for those retired teachers already receiving their pension. This is because the TPS is "unfunded" and has been established as a "notional fund" to which teachers and their employers are required to contribute prescribed amounts towards the costs of pensions.
The Hutton Report states that the present pension scheme is affordable and works well. It will not work well if the number of teachers paying into it is dramatically reduced.
I wonder if anyone in the Government is considering the following. First: freeze and guarantee all pension rights contributed to so far. Second: cancel the public service index-linked pension schemes forthwith and increase the salaries of those currently in the schemes by the amount of the employer's contribution and let the public servants organise their own pensions from now on. Seems simple to me. And fair.
Prince's finances misrepresented
Joan Smith's article "We are all in this together, but is Charles?" (30 June) and your news story of 29 June about the Prince of Wales's finances painted a misleading picture.
The Prince of Wales has 159 employees, of which the vast majority are either office staff who support the official duties and charitable work carried out by him, the Duchess of Cornwall, the Duke and Duchess of Cambridge and Prince Harry, or garden and estate staff working on his farm and gardens (the latter open to public visits which last year generated just under £500,000 for charity). Much attention is focused on his personal staff. As it happens, he has two butlers and two valets; he needs two of each because, obviously, people can't work every day of the year.
Last year the Prince and the Duchess together conducted 751 public engagements and official meetings, organised and overseen by his office. Almost 100 of those engagements were in support of our Armed Forces. During the year, Their Royal Highnesses visited 102 towns and cities in the UK, they hosted 127 official receptions, seminars, lunches and dinners, attended by almost 10,000 guests.
That staff also work in support of The Prince's Charities, the 20 organisations the Prince has set up and inspires to help others in areas of youth opportunity, the environment, education, the built environment and corporate social responsibility. With the help of the Prince and his office, those charities raised £123m last year.
The Prince meets the cost of almost all of this work – and all of his employees – out of his own pocket, using his private income from the Duchy of Cornwall. Because the Duchy has no debt – it is run in a conservative and sustainable fashion – there isn't a need to cut spending in the way that many organisations in the public and private sector are currently being forced to do.
As for his personal spending, which you note increased last year by 50 per cent to £2.5m, almost every penny of that was spent by the Prince on making additional donations to charities.
You also note that the Prince claims a large part of his spending against tax as a business expense. This is true and entirely proper. His taxes, which are audited by the Inland Revenue, rose last year by almost £1m to £4.4m.
Communications Secretary to TRH The Prince of Wales and The Duchess of Cornwall
Gaddafi must be arrested
Colonel Gaddafi may wish to reject the international arrest warrant against him in a similar way to President Bashir who is currently visiting China. But neither Bashir nor Gaddafi should be allowed to arrogantly defy international justice ("Libya dismisses arrest warrants for Gaddafi and his lieutenants", 28 June).
Amnesty has repeatedly pointed to evidence of possible crimes against humanity and war crimes in Libya, including widespread indiscriminate attacks by Gaddafi forces on residential areas in Misratah. We have also highlighted evidence of widespread war crimes committed in Darfur in Sudan.
Countries such as China must arrest visiting war-crime suspects like Bashir as soon as they arrive and ensure they are delivered to face justice.
Failure to do so sends a disturbing signal that such crimes can continue to be committed with impunity.
Amnesty International UK
Should I laugh or cry at the crude double standards? The British Government has backed the issuing of arrest warrants by the ICC against Colonel Gaddafi while at the same time it is turning itself inside out in its efforts (via the ludicrous Police Reform and Social Responsibility Bill) to protect Israeli war criminals against falling victim to citizen's arrest in the UK. The distinction often advanced in justification is that the likes of Ehud Barak and Tzipi Livni were not killing "their own people".
However, that is a shallow excuse: in international law the occupying or besieging Israeli power is just as much responsible for the innocent Palestinian citizens it occupies or blockades.
Beer on the tourist trail
Should any of your readers visit Strasbourg (Traveller, 2 July) and wish to capture the rich brewing heritage of the city, it's worth knowing there are two impressive museums there dedicated to the subject.
The Kronenbourg brewery dates from 1664 and can be visited at Route d'Oberhausbergen, while the Esperance brewery in Rue St-Charles in the Schiltigheim district is also open to visitors. Both museums trace the history of brewing in Strasbourg and show how the first commercial lager beers were stored in wooden casks in deep cellars cooled by ice. The Kronenbourg museum attracts 25,000 visitors a year, which suggests – Independent writers apart – that the history of brewing has some appeal.
St Albans, Hertfordshire
Myths and rituals are important in national life. Every summer we wait to be told that Woody Allen is finally back on form, that Glastonbury was not a sea of mud and that a British tennis player has finally won Wimbledon. None of these things ever happens, but the annual expression of our national myths is an important ritual that binds us together.
If Andy Murray had actually won at Wimbledon the nation would go into shock.
Rejoice! In Andy Murray we have found Tim Henman's natural successor at Wimbledon!
Carry on cliché
Isn't it time that all this correspondence on clichés was kicked into the long grass?
Horsham, West Sussex
We've lived to tell the tale of a perfect storm of clichés and now it's time to draw a line under it. Enough already!
Some correspondents seem to think that this subject has lost the wow factor, but for me it still ticks all the boxes.
South Chard, Somerset
Perspectives on university education
The bubble is about to burst
Kenneth Baker, chairman of Edge, predicts that the popularity of universities will "stall" and that middle-income families will shun these institutions (report, 14 June). As a recently retired lecturer, I believe he is right; the bubble is about to burst.
Things started going pear-shaped when Margaret Thatcher turned perfectly good polytechnics, expertly teaching vocational subjects, into universities. Then Tony Blair set the ridiculous target that 50 per cent of the youth population (currently around 40 per cent) should go to a university, when, realistically only about 20 per cent of the population has any academic ability. The result was that half the university population, who should have been at a polytechnic learning something useful, were struggling to cope with the concept of self-study and research.
This situation should have led to higher failure rates, but universities could not afford to lose the revenue, so the only solution was to dumb everything down. Edge's research that indicates that nearly 60 per cent of the population believe that university education is less valuable than it was a decade ago, suggesting that a majority understands what is going on.
But it is getting worse and worse. These days everything is governed by league tables and so vice-chancellors are pushing staff to award more firsts and to do this requires major moderation exercises. Such moderation assumes that the 40 per cent at university are collectively as skilled as the former 20 per cent, which, of course, is utter nonsense.
However, this kills two birds with one stone as higher awards lead to greater student satisfaction, a key league-table measure.
The overall result is that the majority of university degrees are absolutely worthless and are no measure of achievement. The top universities thankfully have maintained standards, but their number is getting fewer.
So the message to middle-income earners is this; if your son or daughter has genuine academic ability and can get into the likes of Oxford, Cambridge, Imperial College, etc, then skimp and save, beg and borrow, to repay the £9,000-plus debt that he/she will incur each year. Otherwise, universities should be avoided like the plague and employment with on-the-job training is the solution.
Loss of humanities is act of barbarism
Professor Docherty (30 June) must be thanked for his essay on the proposed annihilation of the humanities in English universities. It has to be a cause for deeply depressed wonderment that this barbarism has met with no resistance. It suggests the complicity of vice chancellors and other senior figures in a view that sees education merely as a preparation for work, and understands the market as an appropriate means of understanding what in actuality is a complex and humane social economy.
This in turn posits a view of humanity which understands value to apply only to material goods and their acquisition: the same view that hacks at the wellbeing of the poor, the disabled and others, while refusing to comprehend that the size of bankers' bonuses or footballers' pay packets is obscene. It denies to all but the privileged – which in effect means the wealthiest – the pleasures of learning, scholarship, curiosity.
No other country would contemplate refusing to fund the teaching of humanities in universities, and no other country will follow England's lead, for all others know that "English civilisation" is an oxymoron.
Too many graduates with useless degrees
Is the fact that there are now apparently 83 graduates applying for every graduate job a measure of the depressed state of the British economy? Or is it a reflection of the shortsightedness of the education system our politicians have imposed upon us? Even in boom times there could be no more than – say – five times the number of graduate jobs being created. That would mean there would still be 16 graduates applying for each of them.
Are we not simply producing too many so-called graduates, many of them with useless mickey-mouse degrees, and too few vocationally trained young people with realistic aspirations?
West Wittering, West Sussex
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