The Political Economy of Pension Provision

HOP 2. The Political Economy of Pension Provision

Alan Peacock, Norman Barry

These papers were first presented at a Conference on Pensions arranged by The David Hume Institute which took place in Edinburgh in June 1985 but have been modified in the light of the government's White Paper which appeared in December 1985.

Professor Peacock's paper argues that the debate has concentrated too narrowly on the provision of pensions rather than on the provision for retirement and that the government's own arguments point towards the complete abolition of the State Earnings Related Pension Scheme (SERPS) coupled with the raising of the basic pension.

Professor Barry's paper argues that the 'consensus' over SERPS is a convenient myth perpetuated by the interest groups seeking to maximise the utility of their members by an ever growing public sector. The fact that the British system of government helps to create such groups results in a legacy of problems, such as the burden of pensions, which are virtually insoluble; any major changes in policy impose significant costs on those affected by such changes.