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Category — Social Justice

Inter-generational fairness

16 October 2017

  • Don’t punish the old to help the young – panic policy changes have political dangers
  • Let’s focus on policies that are fairer across all age ranges
  • Better to address problems of housing or student debt directly
  • And take the opportunity to prepare for social care costs that will burden younger people

 Don’t repeat Manifesto errors: Today’s newspaper reports of potential Budget measures to please younger voters seem fraught with danger. The suggestion that older people should be punished to provide more money for the young could harbour potentially lethal political damage. The Tories core voters are older people, it would be rash in the extreme to risk alienating them in the coming Budget. The lesson from the Election Manifesto is that punishing the old is not a sensible way to attract younger voters, but is a recipe for losing support of older generations.

Age is not a reliable indicator of wealth, health or ability to pay: Some young people are earning huge sums, some older people are and always have been living on extremely low incomes. Favouring one age group will potentially alienate others.  For example, specially reduced taxes for 20- or 30-somethings will feel unfair to low paid, just-about-managing families in their 40s or 50s.

Housing costs and student debts should be addressed directly: Many of the young are definitely struggling with student debts and also with housing costs (but so are older people). Just cutting taxes for particular age groups will not solve the root causes of the problems. Student debt repayment plans, lowering the 6.1% interest rate and offering shorter university courses would help.

Build more suitable new housing: Britain has not built enough new homes to support its rising population and councils lack sufficient social housing to ensure those who need such accommodation can find it. Also, many older people would like to downsize from a larger family home once children move out, but cannot find attractive new homes to move to. Encouraging more suitable age-appropriate housing, as well as ensuring older people can still access mortgages if they need to, could help housing affordability issues for younger families by increasing supply.

Incentivise institutional assets to invest in social housing: Quantitative Easing has inflated asset prices, including housing, which has also increased rents. The Budget could incentivise institutions to invest in ‘build to rent’ property, at little or no cost to the Exchequer, with time limited availability of landbanks for construction projects of this kind. This could reduce rental costs for old and young and provide better returns than currently available on other assets.

Pensions tax relief reform could offer flat-rate incentives and remove Lifetime Allowance – but now is probably not the time:  Pension incentives of tax relief are extremely complex and poorly understood. In fact, non-taxpayers can receive a 25% bonus on their pension savings, even though they pay no tax, which is a highly progressive measure to help lower earners, who are often younger. People earning over £45,000 receive more than 66% bonus on their pension contributions. This is clearly far more generous than the 25% available for lower earners, but this impact is not determined by age, it depends on your income and is based around the tax system. Reform of tax relief has usually focused on paying the same bonus to everyone, which would boost the incentives and pensions of lower and average earners rather than helping certain age groups. Such a radical change would actually help women more than men, young more than old and low earners rather than higher earners, but would not discriminate by age. A quid pro quo for reducing the taxpayer bonus to higher earners’ pensions could be to remove the illogical lifetime allowance on pension accruals which threaten to punish those whose funds perform particularly well.

Another major inter-generational issue is the crisis in social care:  Currently, younger generations face being burdened by huge costs of elderly care for babyboomers who run out of money by the time they reach their 80s. The Chancellor would be well-advised to introduce measures to encourage older people who do have money in pensions or ISAs or valuable properties, to earmark a specified sum – say £100,000 – that would cover them if they need care. This would be each individual’s maximum contribution towards their care, after which the State would pick up the costs. Incentives to help older people use their pensions or ISAs to build up a later life care fund – by allocating money that could be passed on free of inheritance tax as long as it provided a care fund for the inheritors or withdrawn from pension funds tax-free – would finally start addressing this crisis. Neither Government, nor individuals have set aside any money for care. The longer the Government delays in addressing this issue, the more older people will fail to prepare for the potential costs. Ultimately, National Insurance might help with these societal risks, but there has been a major failure of successive Governments to prepare for the well-known future burden. The costs of care should not be borne wholly by who need it, but every family should contribute to the costs and those lucky enough not to need it will help pay for those who do.

I urge the Chancellor to avoid knee-jerk panic tax changes that could alienate older voters. Let’s focus on policies that are fairer across all age ranges.

October 16, 2017   No Comments

Pension Schemes forced to stop discriminating against same-sex partners

12 July 2017

  • UK pension funds cannot discriminate against same sex partners
  • Landmark ruling rightly requires pension schemes to treat all partners equally
  • Costs could run to hundreds of millions of pounds

The Supreme Court has ruled that same-sex partnerships must be fairly and properly recognised within UK pension schemes. In a landmark ruling, ( INNOSPEC VS. WALKER) the judges ruled that a pension scheme member who is married to a same sex partner must be treated the same as if they had an opposite sex partner. At last, there is clarity that pension schemes cannot discriminate on gender grounds in this way.

What has the Court ruling changed?  Until today, members who were married to someone of the opposite gender would know that their surviving partner will inherit part of their pension. Even if the member married that person long after they left the scheme, the inheritance rules would apply.  However, if the member had a partner of the same gender, even though they may have been together for decades, their pension scheme might refuse to pay a survivor’s pension on the grounds that the law only recognised gender-equal partnerships since 2005.

Will this affect all UK pension schemes? In reality, most pension schemes have already been treating all partnerships the same, but around 20% of private schemes have not yet done so and Mr. Walker, who has lived with his partner for decades, has sued the Innospec pension scheme because it refused to agree that his partner would inherit his survivor pension rights for the entire period in which he belonged to the scheme. Having had to fight all the way up to the Supreme Court, the issue has been settled and all UK pension schemes will now have to pay survivors’ pensions to same-sex partners on the same basis as they would for opposite sex partnerships.

What might this cost? Estimates suggest that the cost to private sector pension schemes could be around £100million and there will also be costs for public sector pension schemes too. Of course we will not know the precise costs because the money only needs to be paid once the member passes away and only if the  member is survived by their partner.

What other implications might there be? There could be further implications of this ruling, in that widow’s pension rights in many schemes differ from the pension rights of widowers.  In some schemes, a husband cannot inherit the wife’s pension, but a wife will inherit that of her deceased husband.  I expect this issue will now be looked at again – and the cost to public sector pension schemes could be hundreds of millions of pounds.

July 12, 2017   No Comments

Unbelievable injustice – flaw in British law must be remedied urgently

16 September 2016

  • Frightening flaws in UK law uncovered – urgent changes are needed
  • British law allows firms to sue you without you knowing about it – this is an outrage
  • Over 2000 people a day have Country Court judgements against them and have had no defence

Have you ever moved house?  Have you ever sold a car?  Have you ever parked your car in a hospital or supermarket car park?  If so, it might be a good idea for you to check your credit record.  You may find you have a County Court Judgment (CCJ) against you that you know nothing about.

Last year, three quarters of a million CCJs were issued by our country Courts by default, no defence was put in by those being sued and the cases did not even come to Court.  They were just signed off electronically.  But the consequences of those judgments for the people involved can be catastrophic.

It is frightening to learn that British justice allows County Courts to issue a judgment against you in this careless manner, without you ever receiving proper notification, having no chance to defend yourself against alleged debts and the case never even being heard in open court.

The Daily Mail has uncovered shocking evidence of the increase in the numbers of CCJs being issued without any defence being heard.  In the past three years, the number of CCJs issued with no defence lodged has increased by 40%.  Last year, over 2000 every day.  Nearly a million families have had judgments against them, for alleged unpaid utility bills or parking fines which they often know nothing about – and which may not have anything to do with them.    Many firms are making money easily in this way.

You often only discover this if you try to take out a loan or a mortgage and are refused.  Once the CCJ is issued against you, it is lodged on your credit record and you have to go to Court to get it rescinded.  This costs £255 and can take many months.  In the meantime, you will be denied the finance you need.

Examples of this injustice are astonishing.  The person who sold their car, told DVLA about it, the new owner parked in a private car park and received a ticket.  The Parking firm wrote to the previous owner, at an old address, because they apparently received incorrect information.  So the previous owner had no idea there was any problem, the parking firm did not have to prove to the Country Court that they knew who the owner of the car was at the time, nor that they had given the person they were suing a chance to defend themselves.  No proof that they even knew there was any claim against them.

In another example, a young man left university digs, told the water company they were moving and gave them their new address, but a bill was sent to the old address.  The bill was never paid because nobody knew about it, but a CCJ was then issued against the young man.  When he wanted to buy a house he was refused a mortgage because of an unpaid bill nobody told him about.

Here are links to the Daily Mail investigation articles:

This is not justice.  In any other sphere, someone trying to sue you, or requiring you to pay overdue debts, is required to make stringent efforts to contact you and ensure you have received the summons.  For example, landlords trying to contact wayward tenants must prove they have taken all reasonable steps to ensure you have received the information about the case and had a proper chance to defend yourself.  But when it comes to the County Courts, apparently this is not the case.

To check whether you have a County Court judgement against you, you can search or

Ministers must urgently remedy this flaw in the law.  It should be a requirement, before any CCJ is issued, that the person suing for payment proves to the court it has taken all reasonable steps to trace the defendant, is sure that the person they are naming is the relevant person responsible for the bill and that if it comes to light the firm did not take sufficient care to trace the defendant they should face penalties.

September 12, 2016   2 Comments