The £271 billion “rape” of the National Insurance Fund

Amid the Brexit chaos and Queens speech, an American diplomat’s wife and never-ending speculation of a snap election – a landmark court case this week delivered a devastating verdict for millions of women who have seen their retirement plans decimated by changes to the pension age. Millions of women across the country have been hit by the changes which were originally designed to achieve parity between men and women – who claim their pensions were robbed to bail the country out of austerity. But the truth is, the reason for that robbery is much more sinister.

 

David Hencke is a British investigative journalist named ‘Political Journalist of the Year’ at the 2012 British Press Awards. He was the Guardian’s Westminster Correspondent in 1986 and has won numerous awards for his political coverage, including journalist of the Year for his investigation which uncovered the “Cash-for-questions affair“. His exposé led to the bankruptcy of Ian Greer Associates, one of the country’s biggest lobbying companies, and the resignations of two junior ministers, Neil Hamilton and Tim Smith. Hencke has since won an Orwell prize for political journalism. Undoubtedly, Hencke has to be respected for his achievements.

Many of our readers and indeed many of the Women Against State Pension Inequality (known as WASPI’s) still do not know what really happened to their pensions other than the fact that the government has refused to pay them their dues. What Hencke revealed, if the interpretation is right, was that the money was … stolen – which then paid, in part, for the rising liability pension pots of … politicians. We are republishing this article to ensure as many of our readers understand the political class for who they really are.

 

Revealed: The £271 billion “rape” of the National Insurance Fund that deprived 50s women of their state pension

 

The fact that 50s women were robbed of their pensions by raising the pension age is undeniable. But the biggest argument against putting this right has been the cost – a fact perpetually used by the present pensions minister, Guy Opperman, who quotes the £70 billion-plus figure.

Recently I discovered that successive governments had taken a decision  NOT to top up the fund as originally proposed by William Beveridge when the welfare state was set up in 1948.

What I did not know was how much money was lost. Now thanks to an extraordinary paper prepared for the National Pensioners Convention by a social security expert Tony Lynes, and still on the web, I now know. And it is staggering. You can read it here.

The paper was written 12 years ago by a man I personally knew as a fount of all knowledge on the benefit system when I was social services correspondent on the Guardian. He sadly died, aged 85, in a car accident in 2014. There is an appreciation of him in The Guardian here.

His calculation from beyond the grave is that for every year that the government decided not to contribute to the fund it was deprived of £11.3 billion. As he says: “Restoring the supplement at its pre-1981 level would bring an extra £11.3 billion a year into the Fund, enough to meet the gross cost of a £109 per week basic pension.”

We now know that virtually no money was paid into the fund by the Treasury for around 24 years from 1990 to 2014. I calculate – and this will be a conservative estimate – because it doesn’t count the reduced contributions post-1981 – that an amazing £271 billion – yes billion – extra would have been in the fund.

This would pay more than three times over the money due to the women – and even allowed higher state pensions for everybody else now.

 

“Why this didn’t happen is because politicians of all three major parties took a decision not to do this. They took the decision knowing that their Parliamentary and ministerial pension pot would mean they would be some of the wealthiest pensioners in the land when they came to retire. And the taxpayer would foot their bills.”

 

They decided the pain should fall on the electorate instead. In 1995 they knew all the arguments about people living longer and that money paid out in state pensions would go up.

They could have changed the rules and informed the Government Actuary Department that they would deliberately build up a surplus in the fund – so it could pay out as people lived longer without changing the pension age.

Instead, they chose the cheapest route – raised the pension age so they won’t have to subsidise the fund – but try and keep mum so the women wouldn’t realise what they were doing.

The villains are the late Lady Thatcher, John Moore, Kenneth Clarke, Sir John Major, Tony Blair, Gordon Brown, Steve Webb and Guy Opperman. There are many others who stood by and did nothing. That is why 50s women have been left in this situation today.

 

To give the sort of idea of the what the WASPI’s were up against, it should be noted that footage from 2013 was uncovered showing Guy Opperman, who was the Parliamentary Under-Secretary of State at the Department for Work and Pensions, stating that he understood what it was like to live on a zero-hours contract because he once worked as a £250-per-hour barrister. Weeks later, in response to the WASPI’s he was quoted as saying that older women who face cuts to their state pension could take up apprenticeships as a route to re-employment. He was unsurprisingly criticised in the Financial Times in September 2017 for following a “line of pensions ministers with no interest in pensions stretching back to the 1990s.”

 

 

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