Apartheid

Cameron has called the deteriorating pension situation in this country one of apartheid, and he is right.

On the one hand we have a private sector pension situation where final salary provision is to all intents ended. Many of the remaining final salary funds will be ended shortly and in future pensioners will get an annuity based on what they have paid in and reflecting the state of the economy. There will be no open-ended commitment or even indexation.

The reason for this is well rehearsed- a Brownian raid from one of his stealth taxes, the current recession/depression which has reduced stock prices, and the fact that people are living much longer.

In the state sector, there is no problem. Gold plated, fully indexed final salary pensions will continue, with any shortfall made up by the tax payer and therefore unaffected by recession/depression. In addition the workers in the public sector generally have greater security of tenure.

(Little surprise that as the recession/depression advanced, skilled people were leaving the private sector for the rewards in the public sector.

Recently we have heard that council tax payers are already having to pay considerably higher council taxes to pay the pensions for a growing number of council workers and for those who have enjoyed very generous salary increase - huge increases in the number earning more than £50,000 per annum and also over £100,000.

The same applies nationally - more civil servant, and increasingly better provided for MPs. We already have many situations where private sector workers are paying more in taxes for pensions of others than they are paying for their own pensions.

There is here the seeds for trouble in the future. Council tax payers will increasingly find themselves enjoying reduced services and higher council tax, and paying higher income taxes because of government debt and pensions and many of these payers will be on poor pensions themselves.

Increasingly we shall have wealth and comfort in the public sector and poverty in the private sector, rather like that socialist paradise - the USSR. Will the serfs rise, or will they express their feelings in the ballot box, while there is one?

Twelve years ago we had one of the best pension systems in Europe. No-one could say that now!