Comment: ‘Yes’ vote means leaving pension security

A 'Yes' vote would abandon a secure and stable pension system, writes Gregg McClymont. Picture: TSPL

The United Kingdom introduced the first state pension 106 years ago. This was the beginning of the modern welfare state. The Liberal Minister in charge was Welsh radical Lloyd George, but the author of the state pension was the Labour party – or more precisely the rise of the Labour party.

The state pension was not given to working people across these islands without a fight. It was won.

Won by the formation of the Labour party led by a Scot, Keir Hardie, and committed to redistributing the vast resources of the UK to the needs of the people.

Won by the votes of the people who put Labour MPs in Parliament in 1906 and who promised to send more Labour MPs there.

Won from a Liberal and Tory establishment who conceded the principle of the state pension not because they believed it right but because they believed it impossible to resist.

It is the principle established in 1908 by Labour pressure – that this civilized nation has a responsibility to its pensioners – upon which all further pensions progress has been built.

NO POSITION, AT A GLANCE

• The UK’s social security system makes 258,000 payments in Scotland every day

• By continuing to pool and share resources within the UK we can protect public services and welfare

• Over the last decade, poverty in Scotland has fallen significantly for children, working age people and pensioners.

• The Institute for Fiscal Studies has reported a separate Scotland would have to make around £6 billion of cuts to public spending or tax rises, over and above those needed as part of the UK, in the years following independence.

We built this pensions system together across the UK and we all continue to contribute together. Our parents, grandparents and great-grandparents helped build a system where everybody from Wick to Walsall can be sure of dignity in retirement.

Governments come and go but the sharing remains. The people of the UK who built this system did so on the basis that we share our resources so that those in need get what they need. The result is that the UK spends far more on the state pension and associated pensioner benefits than in any other area of social security. We do so because of successive Labour governments’ commitment to sharing resources across these islands on the basis of need. And yet progress is sustained not just by Labour governments. It’s sustained by the solidarity and strength of the UK labour movement.

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Just as the rise of Labour 114 years ago changed quickly the rules of politics and led to the creation of the state pension by non-Labour governments, so the continuing centrality of Labour to UK politics as the official opposition as well as in government, has protected the gains of social progress.

No Tory government since the rise of Labour has dared abolish the principle of redistributing resources across this island on the basis of need. Politicians respond above all else to pressure and the commitment of the labour movement across all parts of these islands to social solidarity via resource sharing and redistribution has constrained all Conservative governments.

The UK pension system is not perfect of course, nor is the system in any nation. But the UK system is built, it is sustainable and it has a broad spread population to support it; a system built through the generations and there for the generations to come. That’s something worth celebrating, defending and promoting. It’s the promise of Labour solidarity, a promise that even the Nationalists’ promise to honour insofar as they say there will remain a pan-UK pensions system.

But they can’t keep that promise. It’s the same kind of arrogant assertion which we have wearily grown used to from the Nationalists, be it on currency or the EU.

The people of Scotland deserve the facts. And the fact is, if we vote to leave the UK, we vote to leave the UK pensions system.

The UK state pension would cease to exist in Scotland. The security and certainty of the UK’s pension promise would disappear overnight for Scottish pensioners and for the rest of us who have been paying into the system.

The only promise Scots would have about their pensions would be from Alex Salmond. A man who has failed to answer the big questions in this debate time and again.

Scotland receives £200 million a year more for pensions and pension credits than a standard UK distribution of payments by population. This redistribution from the rest of the UK would disappear at exactly the time when Scotland’s ability to pay pensions begins to come under increased pressure from the demographic challenges of an ageing society.

What’s more, because of EU rules on pension schemes operating in more than one country, Scottish pension contributions for occupational schemes may have to rise, or benefits fall, or schemes close, as the Institute of Chartered Accountants of Scotland, has emphasised.

The case for keeping the UK pensions system is clear. It’s supported by Scots who can pool and share risk as part of a more secure UK insurance policy against indignity in old age. It’s even supported by the SNP to the extent that its White Paper asserts a pan-UK pensions system can continue.

But remember for Alex Salmond this is not about pensions. It’s about politics.

He cares more about breaking the political union across the UK – it’s his life’s work – than preserving the common benefits of the economic and social union.

We don’t have to take that risk. We can vote No to Alex Salmond’s political obsession and instead have the best of both worlds, our Scottish Parliament with more powers guaranteed backed up by the strength, security and stability of the UK.

• Gregg McClymont MP is shadow pensions minister