UK pensions

Recently a neighbour mentioned to me how the SNP had pledged to double pensions in an independent Scotland. I knew this wasn’t the case and did indicate that I was sceptical, but in the interests of neighbourly peacekeeping I didn’t go into details,, but did urge him to look up what they'd actually voted on. Nevertheless it does appear to be a commonly held conception among nationalist supporters both that pensions in the UK are terrible, and that an independent Scotland would magically find the money to massively increase them without taking it from another part of government expenditure (or indeed in the typical indyfantasy to increase them while simultaneously increasing spending on most other areas too).
In reality, far from there being an SNP resolution to double pensions, there was a vote at an SNP conference in late 2019 to back a plan to investigate the raising of pension payments in an independent Scotland to try and meet the OECD average of 63% of previous earnings, and how that might be afforded. Which is is all well and good, however one wonders what would have to be sacrificed and by whom to achieve it, or will happen if the conclusion is that it’s not affordable, we all remember how the Growth Commission Report was brushed under the carpet, and how any in-depth honest debate of it was avoided when it didn't say what the masses would want to hear.

Of course UK state pensions are constantly under attack by SNP because the headline that the ‘UK state pension is the lowest in Europe’ makes an handy soundbite to weaponise and hit the union with, even if it is rather lazy on detail. However, as with most things the reality is somewhat different and much more complex.

Comparing pension systems
The problem with comparing pensions internationally is that each country has a different pension ‘ecosystem’; people retire at different ages, they pay in different proportions, they have different access to additional benefits and perhaps crucially they have different access to alternative means of providing a pension or income in retirement. Also the extent of long term-liabilities on the state varies, and for some countries with big and growing liabilities something is going to fail at some point.

These handy comparisons that are banded about, take little or no account of significant differences between the UK pension ‘ecosystem’ and that of other countries. The easiest way to understand this is to think of ways in which pensioners could obtain retirement income. There are four main sources:

State pension: This is the income the state pays you when you retire, however it can be calculated a number of ways e.g. same for everyone (flat rate), or based on former earnings, it may also be based on how much or how many years you contributed. It almost certainly involves you, and sometimes your employer paying in a certain amount of your earnings to the government.

Occupational pension: This is a pension scheme provided by your employer, you may have to pay some money in from your earnings and your company will put some money in too, some more generous employers may contribute all the money (although your salary may reflect that). The pension may be calculated as a proportion of your final salary or average earnings, or it may be a scheme based on income from investments, and contingent on their performance. Not all countries practice this sort of system, the companies may just pay into a state scheme instead

Private pension: This is an income derived from a scheme that the individual sets up with a pension company, or possibly buys from a pension company using a large lump sum payment. It may require paying in a certain amount on a regular basis over many years. And will generally be based on investments in a range of assets and the amount your get back out will be dependent on asset performance.

Savings and investments: essentially income from other sources such as cash savings, investments funds, shares, property etc.

Oh, and I suppose we should throw in a fifth:

Work: Many pensioners continue to work as a way of topping up their income and or doing something they enjoy or to keepi mind/body active. 

There may be other sources of retirement income but those are the main ones. The important thing to remember when comparing countries is that the relative proportion of average pension income that these different sources make up varies considerably from country to country. Thus to only consider a single factor when trying to calculate how well off pensioners are  in general can give very misleading results. 

Testing the comparison
If we just compare just the state pension then the UK comes quite far down the list relative to other advanced economies as a proportion of previous earnings, but once you add in the other sources the comparison improves considerably. That’s not to say that UK pensions are great, there is still plenty room for improvement.


The fact checking website Fullfact concluded that when comparing the minimum income of pensioners in France, Germany, Spain and the UK that: "UK pensioners can expect slightly more money from the government than their European counterparts, although comparing gross figures doesn't take into account the different average incomes and cost of living in these four countries." (Fullfact pension compare 1)
This is because while the maximum state pensions and the average in these comparison countries is higher, the amount the poorest receive is subject to a range of top-up benefits which result in UK being much more in line with the others.
The same article also has a graph that illustrates the much bigger role that occupational pensions play in the UK: Six times more important than in Germany and such pension schemes are almost non-existent in France and Spain. Acknowledgment of this important factor is also usually non-existent when pensions are used by separatists to attack the UK.

Fullfact have examined these sort of claims more than once too: (Fullfact pension compare 2).

The UK approach is sometimes referred to as ‘multi-pillar’ because pension income is supported by a number of sources, Denmark and the Netherlands are broadly similar, but many other European counties, such as the aforementioned French, Germans and Spanish rely much more heavily on the public pension pillar. This means that much of the burden of pension provision falls on the state rather than being spread across state, employers and the individual. All well and good if the state has been responsible in how it funds them, but if it hasn’t……

And what we find is that many countries run their pension schemes as ‘pay as you go’ where payments coming in from people are not invested in assets for their future but used to pay current pensioners, leaving their future affordability vulnerable to economic and demographic changes. The UK does this but as we’ve seen the UK state pension is proportionally significantly less on average than in most European countries so the burden on the state is also theoretically less (although still significant). Some other countries have a much bigger timebomb built into their system (IEA demographic time bomb). This has led many countries to increase (or try to) their statutory pension age and to consider a greater role for private provision as already occurs in the UK and Netherlands for example, but it’s easy for opposition and populist parties to portray a reduced role for state pensions as government cutting people’s ‘rights’ and thus resistance can be significant.

Unfortunately the UK system requires people to think about their pensions and to forward plan if you want a good one, something that many UK citizens seem reluctant to do. Also the generosity of occupational pensions has declined significantly in the last twenty years and some have closed entirely to be replaced with pensions people have to organise themselves. And of course the lowest earning don’t always have the luxury of making additional provisions. 

The question remains, that if an independent Scotland is to dramatically increase state pension provision, how will it fund it, and how will it affect the occupational and personal pensions of millions of Scots, or indeed the very significant pension and investment industry that employs many Scots to provide those services. Current Scottish state pensions are not backed by any sort of fund and are paid out of tax receipts, there is no fund to be handed over on Independence Day, an independent Scotland would have a pay as you go scheme from day one….

Then there is the very significant question of how existing pension entitlements are dealt with in an independent Scotland where the pound is replaced by a new Scottish currency. See my next post for how that might play out on those Scots who have diligently paid their way.

Coronavirus, Some Thoughts Part 2: Cummings and Goings

Dominic Cummings, what is he like eh?

Remember what seems like years ago when everyone was baying for SG medical advisor Cath Calderwood’s blood because she traveled 30 miles to Fife to ‘check on a holiday home’ taking hubby, kids and dogs with her, on two separate occasions? Roll on to this week when we discover that PM advisor Cummings suspected he had the virus and then drove 260 miles to his parents on the basis of needing childcare while he and his wife isolated.

Suddenly many of the people who though Calderwood was right out of order are falling over themselves to excuse, defend and justify Cummings’ goings. Yes it's a different set of circumstance but a fair chunk of the population still sees the two as equivocal, and wether we like it or not it's perception that counts in politics.

The Dominic Cummings story has turned into a media circus (#cumgate as one of the Twitter hashtags would have it!), this is regrettable, unseemly and given the likely level of punishment that would have been meted out if the police had decided to issue a fine, somewhat out of proportion. And yet….

He hasn’t broken the rules they say….No? As far as I can remember the government advice until recently has been:

Self-isolate at home 

Don’t undertake any unnecessary journeys, (particularly long distance ones

Here’s a screenshot from NHS.uk on 23 May even after movement restrictions were eased in England:

That’s pretty clear, about staying at home.

Of course within a few days of the Cummings news breaking the advice had changed, decide for yourself if that is coincidence....

Same Page now: https://www.nhs.uk/conditions/coronavirus-covid-19/what-to-do-if-you-or-someone-you-live-with-has-coronavirus-symptoms/staying-at-home-if-you-or-someone-you-live-with-has-coronavirus-symptoms/

What did he do?

Cummings and his wife apparently both had Covid symptoms, so Cummings popped his kid in the car and they all drove from London to Durham (lets be honest, that’s a long distance by anyones measure) so that he could isolate on his parents property and his family could look after the kid if required, although I believe it then transpired that he and his wife actually looked after the kid (although that bit of the story is murky).

Its frankly pretty unbelievable that he couldn’t have arranged for the kid to be collected and taken to the relatives if and when he and Mrs Cummings were too seriously unwell to do it or that a family of their means and connections couldn’t have found an alternative solution; or was it just too inconvenient,compared to a few hours drive to a cozy family cottage?

So what's the problem?

But from a political point of view his actual actions pale into insignificance compared to their impact once they came to light. This was all so bloody predictable, the PM should have realised where trying to shrug the episode off would lead (perhaps if he spent less time listening to Cummings advice he might of!). The problem is not particularly with what Cummings did, which was to a degree understandable, but rather in the way he and his boss have reacted to it becoming public. I personally don’t really care much about Cummings choosing to relocate his family to an empty cottage on his parents ‘estate’ so that they could isolate together somewhere where family were nearby to assist if an emergency required. What I do give a stuff about is how this and the Government response will be exploited by opponents such as the SNP, and the fact that the PM has handed them a weapon to use against him, his party, and for the SNP at least, by association the UK.

Many thousands in a similar position to Cummings didn’t have the luxury option of an cosy free estate cottage, or even if they did have an alternative place to go they still tried to follow the spirit of the government guidance i.e. “STAY AT HOME” and made other arrangements that were perhaps much less convenient to them personally, and they did it because they thought they were doing the right thing as per government guidance.

I have read arguments that Cummings son was autistic with special needs who 'might' have been traumatised if he was not cared for by specific relatives.  I haven’t heard Cummings use that as a specific reason though. Is his son autistic? and if he is then how traumatised by unusual arrangements under lockdown would he be? To be cold about it, frankly it’s tough, loads of people are upset and distressed by this pandemic, he’d be joining a club of hundreds of thousands of other children and adults similarly traumatised living under 'lockdown' rules. People that couldn’t be with dying relatives or attend their funerals, lonely pensioners who have forgone social contact for months, vulnerable people who have struggled to get provisions and services or who simply don’t understand why their routines have been so badly disrupted and their friends and family don’t visit, cancer sufferers who have had their treatments disrupted, people awaiting medical procedures, forced to wait for extra months in pain and discomfort because they can’t go where they would otherwise have gone, lots of people have been inconvenienced and worse, we used to be "all in this together".

It seems to me that Cummings decided to break lockdown and drive while infected not because it was his only option, but because he could, and because it was much more convenient for him to do so. In point of fact he did it for selfish reasons because he wasn’t prepared to endure the inconvenience of additional difficulties and worries of staying at home (as the government he works for was telling people to do. I’m unconvinced by his supposed fears of being doorstepped by protesters, I’m sure he had threats and abuse long before Covid and ironically (and unfortunately) if anything it’ll be worse now if the angry baying mob outside his door this week is any guide. Besides, when we were in full lockdown any protester would be easy to spot in an empty street and the lack of traffic would have ensured a rapid police response, particularly if his friends in high places had already told the police of any security concerns. Frankly in my opinion it’s a convenient smoke screen.

One of the additional embellishments to his story that attempts to explain another sighting of him on his grand tour of County Durham, (I.e. his appearance in Barnard Castle at a later date) is frankly bizarre.  He claims that once recovering from the virus they contemplated the return drive to London but poor Dominic felt his eyesight was a bit dodgy and he might not be up to the drive. So what does he do? He takes the family for a 30 mile drive to ‘test’ his eyesight and see if he’s safe to drive. Now let’s not forget that a primary premise of the defence offered is that this is a man who cares so deeply about the wellbeing of his child that he prioritises that over the lockdown rules, and yet we find him admitting he’s happy to chuck the kid in a car and go for a country drive to see if his eyes work. Either he’s an idiot or he thinks we’re idiots (which to be fair he probably does have some supporting evidence for!), and that's before we consider the potential motoring offences he might have just admitted to committing, if were true.

The most galling thing for me about this debacle is that his movements are at worst a relatively minor offence (recently confirmed when Durham police said that the Barnard Castle trip probably broke lockdown rules but that he'd have got a ticking off and so long as he returned to the house no fine would have been issued), no worse than what tens of thousands of others have done during lockdown, some of whom have been fined, and some not. But it’s not what he did that is the problem, it is his attitude to it, and worse it is the Prime Ministers attitude to it (and by extension many of his party colleagues). Health minister Hancock was caught slightly off guard at ta recent Coronavirus briefing when asked if they would now review all the cases of fines for people breaching lockdown in similar situations, he said he’d look into it! What on earth? It’d be a lot simpler, cheaper and expedient to just review one case rather than all of them, don’t police and other public employees have more important stuff to be doing in the middle of the biggest crisis since World War II than rearranging mountains because someone important is in the shade? 

What DC and his boss have now created is a situation and a story that will be used continually to beat the government with, and will be cast up whenever convenient further down the line as clear evidence that this is a government run by people who think rules are for the plebs and that the elite can and do as they damned well please, and worse will just shrug it off brazenly when found out. It's ironic given Cummings' alleged 'anti-elite' approach (a fabrication seemingly as hollow as Trump's 'drain the swamp' slogan, but that some voters eagerly lapped up) I honestly hardly give a toss if Cummings traveled to Durham to safely isolate, I do give a toss about the utter PR disaster its mismanagement has created, Labour, SNP and just about everyone else must be rubbing hands in glee at this mismanagement sh*tshow. Certainly opinion polls appear to support that assertion! 

It didn’t have to be like this, The PM could have come out and said something along the lines of "Dominic is very sorry and has apologised to me personally, he panicked for his son and made a rash decision that he thought best at the time and in retrospect he regrets that decision. I still highly value Dominic’s advice but both he and I realise that it would be inappropriate for him to continue providing official advice on the pandemic crisis so I will be moving him to focus on (blah blah Brexit and anything else)".

Yeah he’d still get flack but he’d of acted, Cummings would have apologised and be seen to at least suffered some minor punishment, then government could get back to business as usual having neutralised the worst of the story. Then in a few months time Cummings can be wheeled back into whatever position the PM see’s fit in true Mandelson back from the dead fashion. Besides the way things are going in a few months time Boris may be dealing with much bigger PR problems as the results of his Covid management strategy become clearer.....

What they have done instead is dig a great big hole, stood in it, and handed hoses of sh*t to let their opponents fill it up. 

We’re in Scotland where the anti-tory machine is permanently in overdrive, they just provided it with lots more fuel. It's not as if the way things are currently panning out that Boris has bags of goodwill to spare in this Covid-19 crisis. either here in Scotland or in the wider UK, and the Cummings affair is already having an impact on his popularity (see below), maybe temporary....maybe not:

But rest assured, unless action is taken this will be brought up again and again....

E.g. https://www.independent.co.uk/news/uk/politics/boris-johnson-approval-rating-opinion-poll-dominic-cummings-lockdown-coronavirus-a9532471.html

https://www.businessinsider.com/boris-johnson-polls-dominic-cummings-approval-rating-lockdown-trip-2020-5

Coronavirus: Some Thoughts Part 1

Where to begin?

It would be fair to say this has not come out of nowhere, we’ve known about the spread of Coronavirus (or more correctly Covid-19) in China since last year. However over years we’ve become accustomed to outbreaks of infectious respiratory diseases in various parts of the world and related concerns about pandemics (e.g. SARS in 2003 and Swine flu more recently) but they’ve never really amounted to much in global terms. Thus people have become complacent about the real and genuine risk to us all.

It’s all very well to blame governments for failure to prepare, but they are always prisoners to economic reality, and the immediate concerns of the electorate. It is probably true that prior to this outbreak the NHS could have used extra some extra ventilators and other equipment if ithey were available, but how many extra, 100, 1000, 10,000? If government bought that many in normal times would most just sit on a shelf underused?  There would have been many who would argue that there was other equipment/drugs or services that the NHS needed more, and they would have been right.

Governments cannot have every single bit of equipment they might need for every conceivable situation readily to hand in the volumes required, there is quite simply no money for that. Thus they have to ensure there is some equipment and that there are contingency plans in place for the rest.

The electorate as a whole might never have countenanced a government stockpiling tens of thousands of expensive ventilators, oxygen cylinders, and additional millions of facemasks and other PPE ‘just in case’, when the NHS needs so many other things. Hardly anyone alive has experienced a global pandemic like this and few would really appreciate how bad it could be or the speed at which it might take hold (we do now). Arguably we are very lucky that this virus is not so deadly in the grand scheme of things, and yet that is of little comfort to the tens of thousands who have got seriously ill and the millions in vulnerable groups among whom the risk is much higher. It would be true that many have foreseen this type of event and argued strongly that we should be more prepared for a pandemic, but you will find that is the case for most disaster scenarios and most have never happened (yet).

Having been involved in government contingency planning in the past I am well aware that unless a plan has been tested for real it is unlikely to work like clockwork or anywhere near it,  so the fact that not everything goes well is just the nature of the beast. All of these plans undergo desktop exercises to some degree but such testing is of limited usefulness. One can be sure that after this the next pandemic contingency plan will be much much better, but that is of little help now.

Currently Twitter is bouncing with accusations and counter accusations about whos fault this is, the media is full of all sorts of stories, good and bad to prove a political point. My own experience, particularly in relation to what government is doing (and I mean at all levels, i.e. UK, SG and councils) is that in these situations external commentators and journalists alike are rarely in possession of all the facts or aware of all the approaches government is considering and investigating, particularly given the situation; information and advice is constantly changing and being updated. It’s almost certain mistakes will be made, and when it is all forensically reviewed in the aftermath some of these will be picked on and pursued relentlessly to make political points. They key response of government should be to stick to the scientific advice when it is clear and when it is not strive to obtain consensus agreement for any approach, oh and for god sake don’t take advice on a science matter from a political advisor, unless it's about how to sell what your actual scientists agree you need to do to the voters (even then it might bite you back).

The UK gov is getting a lot of stick from the usual suspects, and by that I mean the people who would be attacking it anyway and who are attempting to use this crisis to further their own agenda. The Scottish Government is similarly being criticised (and I admit, sometimes by me). In the context of Scottish politics there is a bit of a tit for tat going on between hard core independence supporters and hard core supporters of Scotland's place in the UK as to who’s administration is more incompetent. But few of these people have access to what is going on and being discussed; for example what has been agreed in COBRA and the associated advice both in UK gov and SG. The UK strategy is SG strategy for now, although Sturgeon has on occasion seemingly chosen to be out of step in the timing of some interventions, arguably this looks to many cynics as if that could be more of an attempt to appear to be ahead of the UK in taking the initiative, but time will tell.

The recent announcement that Sturgeon's administration is setting up a new advisory expert group for Scotland at first just appears to be yet another attempt to look as if SG is autonomous and in control. However, on reflection it is perhaps an admission that its current advisors might not the be quite the right people for this crisis. This doesn’t mean that Chief Medical Officer Cath Calderwood (a obstetrician/gynacologist with much senior health management experience) or the Chief Scientific Advisor Sheila Rowan (a gravitational physicist) are incapable, only that in terms of immediate disease control strategy their own areas of expertise may not be so useful (particularly Rowan’s!). Calderwood’s experience in health management and in-depth first hand knowledge of the NHS is almost certainly very valuable in terms of NHS operating procedures and how it copes with what is happening/coming so she absolutely has a role to advise there but she is not an epidemiologist, unlike for example Chief Medical Advisor to UK gov Chris Whitty. In terms of considering appropriate courses of action to tackle the disease spread the SG may have found itself a little short and having to defer to UK advice, hence the expert group being drafted in to reinforce current advisors. Inevitably this will lead to disagreements with UK over certain points of strategy or the interpretation of data, whether these will be used constructively in a spirit of cooperation, or milked for the purpose of fostering yet more anti-UK grievance and promoting differentiation and division remains to be seen, but many of us aren’t hopeful.

Xenophobic UK? Another Scottish nationalist exaggeration.

How racist and intolerant is the UK?

Well according to many in the Scottish separatist movement, it’s some kind of xenophobic racist intolerant land of bigotry (all words I’ve hear to describe it and it's citizens, well, those south of the tweed of course....), and this is one of their excuses for demanding Scotland leaves a brexiting UK and rejoins the EU, which as you’ll see later does make one wonder if they’ve ever spent much time in much of Europe, other than briefly as a tourist….

Statements such as the one in the image above are bandied about as ‘fact’, unquestioned by those who willingly lap up anything that reinforces the nationalist narrative, that anything to do with the UK is bad or broken. Sadly this is how low the debate has sunk for the some of those sucked into the nationalist vortex, yet more ‘othering’ of our fellow UK citizens is fine if it’s in support of the cause.

On one occasion I argued with an individual who literally described the UK as a “hellhole of intolerance”, such comment reveals a stunning lack of awareness of the situations that much of the world’s population finds itself in. One has to wonder if the originator had ever travelled beyond the Auchtermuchty city limits, although to be fair a more likely explanation is simply that they are prepared to lie and exaggerate in order to try and ‘persuade’ people to their cause. Quite simply most of the seven billion plus people in the world live in far worse conditions, under far worse political regimes and with far fewer opportunities, rights and services than the majority of UK citizens, many of them also live in societies less tolerant of those who are ‘different’ in some easily identifiable way.

Lets have closer look at the implications of the above tweet from @Meljomur: Firstly is Britain xenophobic? Well, I suppose we must be slightly as there are undoubtably some xenophobes living here, as there are in most countries. But how many intolerant bigots does it take to define a  country as ‘xenophobic’? I doubt she’s quantified it. 
If we were to put a value on it then @Meljomur might be surprised that many of the ‘EU citizens’ who she implies might at least be able to escape it by going home would actually end up going somewhere potentially more xenophobic! Of course I doubt Mel did much research before typing her tweet. Do I have any evidence for this assertion that much of Europe is more xenophobic? Well yes:

The map on the following link is derived from research into white attitudes to black people across Europe and shows that while the UK has some racist attitude, it is one of the lowest; lower than most other European countries (including France, Germany, Poland, Italy, Spain, Portugal, Finland, the Baltics, Czech Republic, Hungary and many others)

https://metro.co.uk/2017/05/03/this-map-shows-the-most-racist-countries-in-europe-and-how-britain-ranks-6612608/

In the map the shading goes from blue (less racist) to red (more racist), low and behold the UK is comfortably on the less racist side of the scale, although admittedly still racist. I suspect this is hardly a surprise to anyone who has spent a lot of time on the continent away from tourist areas, and mixed with the locals.

In terms of immigration, a study by the EU themselves looked at attitudes to immigrants among member state populations. Again the British came in at the higher end of the scale in terms of people being comfortable interacting with immigrants:

https://www.economist.com/graphic-detail/2018/04/19/europeans-remain-welcoming-to-immigrants

What is also interesting if you examine the chart above, is that even in the few countries that had a higher percentage of people ‘comfortable’ with interacting, most of them had slightly more proportionally that felt ‘uncomfortable’ (as opposed to don’t know) in fact looking at the chart Britain has the second lowest percentage of people who feel ‘uncomfortable’ interacting with immigrants; what a bunch of xenophobes we are eh?

There are lots of studies that illustrate that Brits are not really any more racist or xenophobic than our European neighbours, and that there are many countries in Europe that often have far worse attitudes than us. Where the UK falls in these studies obviously varies, but it’s often in the upper (more positive) half of results. Here are a few examples:

Above from a Chatham House RIIA survey, UK had the second lowest proportion of respondents who think we should ban muslim immigration.

Above, from the Pew Global Attitudes Survey, UK attitudes to refugees and whether they are perceived as terrorists, criminals or job stealers seem quite enlightened compared to some of our EU friends.

 Above, another Pew metric, combining various views on immigrants, religion, nationalist sentiments and attitudes toward minorities. The UK is very much in the middle, with a number of EU countries scoring higher on the scale towards 'intolerance',

Above, More Pew research on whether populations view immigrants as an economic burden or make our economy stronger. Italy looks like a fun place to be an immigrant

In short there is plenty of evidence that the tweet pictured at the top of this post could reflect a poor understanding of the nature of xenophobia in the EU, or indeed that they just make stuff up to confirm their own bias. The worrying thing is she probably believes it.

Here's an interesting view on British 'post Brexit vote' xenophobia, written by an EU resident in the UK:

https://www.irishtimes.com/life-and-style/abroad/are-the-british-really-as-xenophobic-as-they-ve-been-made-out-to-be-since-brexit-1.3910892

This particular quote says it all really: "statistics now suggest that the Brits are broadly less racist than some of the people they're supposedly racist against"

Those who play the xenophobia card in order to virtue signal to the EU and smear the UK might do well to bear that in mind.