Tag Archives: credit

Tossers and John Hutton

Now that my various major work crises are out of the way for another calendar year, I will hopefully have more time to spend on this blog.

Right now, two things leap out regarding Intergenerational Equity.

The first is John Hutton’s call today for raising the pension age to 68.

I have to say, I’m with Hutton on this.  The choice really is as stark as raise the retirement age, or force our children to pay the price.  Personally, I’m prepared to accept that there is some give and take on this.

Unfortunately – and unsurprisingly – Labour’s paymasters, the Trade Unions do not share this view.  Indeed, the Labour Conference actually voted down proposals to raise the retirement age back in September.

Malcolm Sage from the GMB union, led the opposition to “any suggestion that the state pension age should rise before health inequalities in the UK are eradicated and improved longevity is equally shared by all.”

Well, actually, the proposal is to phase in raising the retirement age over 40 years.  Is he seriously suggesting that longevity won’t be significantly higher across the UK in 40 years?

Barry Camfield, from the TGWU, added to the criticism: “We want to abandon this threat to voiceless children today that they will have to wait until 68 for their pension and I nor my union are prepared to mortgage and sell out children in years to come. We stand up now for those children.”

No, you’re selling out those children by forcing them to pay massive extra taxes just so you can squeeze a bigger pension out of them.  Trust me, mate, they don’t want your “help”.

Speaking of Tossers, the Tories have launched this new viral marketing ad, which must work because I’m linking to it.

On the one hand, it is true that many people are lured by cheap credit into buying tat they don’t need.  That’s all fine and dandy, and obviously these people should be discouraged.  But if you think that is the be-all and end-all of the current credit culture we have, you are sorely mistaken.

Take me for example.  I resisted getting a credit card for as long as possible.  Eventually I succumbed because of a combination of an employer shitting me about, and the fact that no bank would lend me a responsible loan until I had “improved my credit rating” – i.e. got myself a credit card.  Later, when I sought to consolidate my loan, the same company wouldn’t help, forcing me to get a loan somewhere else.

I’m not claiming to be entirely blameless here, I freely admit to making mistakes, but I’m really not that profligate.  Most of my debt mountain was accrued during particular crises when I needed credit at short notice.  And it was accrued using credit cards with high interest rates because no-one would give me a cheaper loan.

The bottom line is, a lot of the current credit crisis is rooted in the fact that young people are being clobbered by a combination of student debt and exorbitant house prices.  The Tories have precisely nothing to say about either issues.  Until they do, they should watch who they go around calling tossers.

Labour: young people are feckless. Lib Dems: no, they’re just dumb.

Labour and Lib Dem spokespeople have been competing on how best to insult young people struggling to pay for their own pensions this week.

Speaking at an Institute of Public Policy Research meeting, Pensions Minister James Purnell highlighted the fact that the number of young people saving for a pension has gone down in the past five years from 1-in-3 to 1-in-4. His explanation is simple:

“At the moment, young people are acting as if they expect to be able to fund a longer and longer retirement with less and less saving.”

Meanwhile Lib Dem Shadow Chancellor Vince Cable has been highlighting the huge levels of credit that young people are currently taking out:

“This research highlights the fact that there is a pressing need to help the young when it comes to financial understanding.

“All the signs point to a huge shift in the financial knowledge of young people now compared with their parents.

“The Government’s university tuition fees, high house prices and the aggressive marketing of credit are all contributing factors.

“Although there is some financial education and help for people when they are in difficulty, the focus should be on tackling this problem before it occurs.

“There should be a genuinely independent financial advice network to help people before financial hardship takes hold.”

To be fair on Vince, he does at least refer to contributing factors such as house prices and graduate debt, but he doesn’t propose doing anything about them – he magic bullet is simple more education. James Purnell doesn’t even go that far. His explanation are “Three Cs” – confidence, complexity and culture. All three may well be true, but that is to pretend that pensions are wholly divorced from everything else.

The reason a “live fast, die poor” culture has emerged is that credit and depending on parents is the norm for young people these days; it’s how you get on in life. Lecturing people about depending on too much credit is a little rich in a country where it is government policy to have every young person in hundreds of thousands of pounds of debt before they hit thirty.

And are we really expected to believe that the previous generation were any more careful with money than we are? Last time I looked, they spent their youth on drugs shagging anything that moved. The generation before, that grew up in the 1920s and lived through World War Two, certainly knew the meaning of saving for the future. I’ll take lectures from them, but not their profligate children.