2007 - 2022

On Pensions and Cocoa


Scotland voted against uncertainty in the referendum. The people decided that the best way to protect their pensions was by voting for the Union. Oil was a “volatile” commodity, and volatility could be avoided by voting for the Union. The Union represented protection from risk and fear; and although such faith in the Union required everyone not too think too hard about how such a Union could have suffered the sudden, catastrophic destruction of its financial system in a Credit Crunch that nobody could avoid (but that nobody in authority in the Union saw coming); the last seven years have (somehow) managed to show, in spite of everything, and especially for Scots pensioners, the strength of the Union.

Of course seven years after the Crash the deficit has still only been reduced by 33%; there is still 67% to go, which at the level of historic rates of reduction achieved so far could take another fourteen years; at least if we simply ignore the fact that the reductions in government spend to achieve this (i.e. austerity) has relied on the easiest cuts to spending having already been made. The next 67% of cuts will require tougher (more painful) decisions to be made. Let us not think about that. Let us think about the optimistic forecasts the Government has made to justify their view that the deficit will be eliminated by 2018; a mere four more years of increased austerity.

Even with more cuts this target is only achievable with the help of economic growth; but pensioners knew they could vote securely for the Union because the economic recovery had begun. We were constantly reminded of every positive sign of economic growth throughout the referendum; indeed Britain was said to be the most successful country in Europe.

Unfortunately the deficit is not the only problem; think of it as a mountaineering expedition (all pitons and frostbite) that some pensioners will not live long enough even to see the summit scaled; for only such a metaphor gives an impression of the scale of the problem. Eliminating the deficit only takes us to base-camp; the real financial Annapurna has then still to be climbed. The scale of the National Debt is our Annapurna, and that distant and receding peak has been rising exponentially through the aftermath of the Crash, and will go on rising rapidly until the deficit is eliminated. Then we are left with the vast obligation of this Union’s national debt (£1.7 trillion+ perhaps ++?), not to forget the interest repayments. How we are going to do this debt repayment trick in Britain remains something of a mystery. A mystery especially if we worry how Britain will pay the interest (I will leave capital repayment schedules even more mysteriously hanging in the air; perhaps they will revolve endlessly until the end of time) when interest rates, currently at historically unprecedented low levels, return to more conventional norms. What happens then? What happens if base rates increase by 3%-4%? What happens to the London property bubble then? What happens to mortgage holders throughout Britain then? Oh, and what happens to the £1.6 trillion of British private debt?  Best not to think about £3 trillion+ of debt (public + private) accumulated within the Union. Best not to think at all; or think about how the City will come to the rescue of pensioners by magically producing vast profits, just like before; presumably on the scale of the money they lost in the Crash, and passed the bill to the public purse: eh, perhaps not such a good idea. Or better, think about the economic recovery, think about all that growth from; oh, well wherever. We are going to need it.

Since the referendum Unionists have felt vindicated by the fall in oil prices; volatility demonstrated! Unfortunately oil is not the only volatility. The Footsie was 6,878 on 4th September, a recovery peak in 2014. On 21st October it stood at 6,372. The 2014 low was 6,195 – also in October. For the full Footsie trends over 2014 presented graphically see: (https://uk.finance.yahoo.com/echarts?s=%5EFTSE). Now that is volatility. The Footsie has lost -7.4% in about a month. I will draw a discreet veil over the balance of trade, for those of a genteel disposition; which suffice to say shows the UK in long term (permanent?) deficit.

Recovery?  Andrew Haldane, Deputy Governor of the Bank of England recently stated in a speech (17th October), that “While still a close-run thing, the statistics now appear to favour the back foot. Recent evidence, in the UK and globally, has shifted my probability distribution towards the lower tail. Put in rather plainer English, I am gloomier”. In June he had been optimistic; in his own jolly cricketing metaphor, more towards the “front foot”.

The prospect of a rise in interest rates has been put off until the middle of next year, with Haldane’s statement sending the pound sharply down in the foreign exchanges (half a cent against the dollar). At the same time Haldane tried to illustrate the upsides; with growth “reasonably well-balanced between consumption and investment”. Unfortunately he selected the wrong point of balance; the UK remains structurally seriously unbalanced between the (high risk) financial sector and productive (I use the word very deliberately) industry. This huge problem has not been addressed at all; save by the penchant for Cameron and Osborne to make economic announcement-photo-opportunities under the backdrop of the few factories left standing in the Union’s industrial dystopia. Cameron and Osborne will run out of factories to visit before this problem is solved.

Haldane also pointed to three economic positives; low inflation, falling unemployment and rising share prices. Low inflation however, conveniently ignores the London housing bubble; and the recent volatility in the Footsie challenges his share price thesis. Indeed the fall in unemployment reflects at least as many problems in the nature of the ‘recovery’ as upside, which Haldane is obliged to recognise when he turns to the negatives; which we may also see the current Footsie volatility as simply discounting. These contradictions are the economic reality.

Haldane sees three economic negatives as presenting “a more sobering picture” of the UK economy. It is about time someone was sober about the UK economy. These three negatives are; falling real-wage growth (hence presumably the unemployment fall), zero-growth in productivity (there is nothing clever or long-lasting about the nature of this growth) and real interest rates are around zero per cent (long-term, this is unsustainable).

Haldane’s explanation of the negatives is as follows:

“These indicators clearly have an important bearing on macro-economic health: among workers, whose disposable incomes have fallen materially below their pre-crisis levels; among savers, the rates of return on whose assets have fallen materially below their pre-crisis levels and are near-zero in inflation-adjusted terms; and among companies, whose underlying efficiency has flatlined since the crisis.
…. ….
Growth in real wages has been negative for all bar three of the past 74 months. The cumulative fall in real wages since their pre-recession peak is around 10%. As best we can tell, the length and depth of this fall is unprecedented since at least the mid-1800s …..This has been a jobs-rich, but pay-poor, recovery.”

A fall in real wages unprecedented since Dickens was a boy. Zero returns on savings. This is Britain in the 21st century. This is the triumph of the Union.

The Union was cheery enough about the state of the Union economy during the critical months of the referendum campaign (all cricket metaphors and growth), but now in the autumn it is back to reality; of course a sober reassessment comes only and immediately after the referendum – strange how fate works out.

I will conclude with two hopefully useful reminders to pensioners throughout Scotland, which they may care to ponder as they stir their soothing cups of cocoa at bedtime: Recovery? Security? Night, night.

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  1. Very difficult to understand!

    Sent from my BlackBerry 10 smartphone.

  2. sdbast says:

    Reblogged this on sdbast.

  3. Jane Paterson says:

    Sadly we won’t see a report like this on the BBC so many old no voters still think they are safe.

  4. twentyworld says:

    Concerning the increase in employment/reduction in unemployment. These figures are , at least in large part, due to changes to whine is classified as unemployed, or whom is no longer claiming benefit.

    You don’t need to work as many hours now to be classed as ’employed’ then you had to previously. I *think* the magic figure is 12 hours a week for the most commonly used statistic.

  5. deewal says:

    Why don’t you form a “We Hate Cowardly Pensioner’s Who Robbed Us Of Our Independence Party” and form Vigilante mob’s to hunt them down in the dark nights ahead ? You could wrap them in Union flags and use them on poles to light your Rallies.

    Go boil your head.

    A 68 year old SNP English Pensioner who campaigned for the best part of the last three years for Independence.

    1. For the avoidance of doubt, I do not hate anyone. I wish the 45% to hold out a hand to the 55% (I wish I was confident the feeling was reciprocated), but I also believe it is reasonable to point out to pensioners that they have chosen the fire over the frying pan. Incidentally, I am a pensioner.

    2. hektorsmum says:

      As a Scottish pensioner who has worked and waited all her life on her country being Independent may I hold out the hand of friendship. Nobody who voted YES need feel any pain, well certainly not from another YES supporter. Unfortunately I fear I cannot hold out the hand of friendship right now to a NO voter, they have given us all grief with their fear/stupidity.

  6. To deewal…remember, it was Unionists burning the Saltire in Glasgow, not the other way round.

  7. William Cummings says:

    Excellent article, tells it exactly as it is. If more of the panic-striken pensioners had been aware of the facts, they might not have acted as they did. The safety they thought they were voting for is largely illusionary.

  8. Brian says:

    I too am a pensioner. I voted YES. 7 out 8 members of my closest family, young and old, voted YES. We knew the arguments, we saw through the lies and the bluster. It’s absolutely unfair to tar us all with same brush. Those most responsible – who should have known better, and probably did, but put themselves first – are the middle classes, who just didn’t want their boat rocked.

    1. Tina Feedgie says:

      Aint that the truth Brian. All the NO voters I know are in the 30-50 age group, comfortably well off and are getting on with life in their wee bubble.

      1. jws says:

        I would agree. I’m 42 and know of a lot of people around this age with young families who voted no. I try not to be bitter but it was staggering to me how people just went on as though nothing had happened after the referendum. I could hardly look people in the eye in the playground in case they saw how upset I was – although the morning after the vote it was obvious who had voted yes. This vote has divided people without question. I think you can feel it in the air. I had a no voting neighbour ask me two days after the result if I was still feeling upset about it. Needless to say not really a friend. I was lost for words. I don’t blame any pensioners who voted no in fear but I find it hard at the moment to forgive my own age group, some of whose biggest concerns genuinely seemed to be losing the BBC and the union jack.

  9. Nothing particularly earth shattering here, or at least it shouldn’t be unless your main source of information is the MMS. The glaringly obvious point is the economies of the West in general and of the UK in particular are stuck in a vicious cycle of low growth and low wages. The calls of orthodox right-wing economists for further and deeper reductions in public spending will eventually expose the lies of HMG and to an extent the policies of HM Loyal Opposition, in that they cannot continually blame the poop and disadvantaged for the economies poor performance. Of course now we have a new scapegoat, or should I say the return of the oldest claimant, for all our economic ills namely Johnny Foreigner in the shape of the EU. This too will only have a limited shelf life as a legitimate source of economic policy or in fact blame. The underlying problems of the UK economy, such as huge levels of personal debt, built up by an unsubstainable housing boom in London and the South East are real and if any long term solution to Britains economic position is to be found, it will not be done without addressing these underlying issues.

  10. Iain Hill says:

    Agree entirely. I am 69 and voted Yes with virtually all my similarly aged friends. Get off our backs, and ask yourself who is behind this divisive thinking,band for what reason?

  11. Fiona Laing says:

    Whilst polling shows that the older folk were, the more likely it was that they voted no, if another few percent of all age groups had been persuaded to vote Yes we would have won. I get more upset with younger folk who voted no as they are of the generation where they find most of their info about anything-from what car to buy, to where to go on holiday online- but they seemed to bypass all of the fantatstic information online about the referendum.

    On the issue of the article- talking about pensions is not something which should be assumed to only concern current pensioners. The information in the article is surely of relevance to anyone reaching retirement within the next decade or two, especially the middle class I’m alright Jack’s who voted no and who surley will suffer the biggest reduction in the lifestyle to which they are accustomed when the economic frailty of the Uk truly comes home to roost. If you are poor throughout your life and can just get by then you don’t have so far to fall and will cope better if pensions aren’t great, however if you have three holidays a year, gym membership, a new car every year and live in a nice big house then it will be quite a hard landing when they realise all to late that a Yes vote was the best chance of continuing this lifestyle into retirement.

    1. hektorsmum says:

      Well said Fiona.

  12. hektorsmum says:

    As an Auld Age Pensioner I am sorry I just cannot understand the logic in how so many other Auld people voted. Have we a larger amount of people suffering from Dementia or at the very least lack of memory. Anyone knows that the Union has impoverished us all at one time or another. I am old enough to have been in my early thirties when we had the 1979 Referendum and Scotland was cheated out of the first Devolution Bill, most people were sufficiently aware when voting in the 1997 one to ensure that that never happened again.
    We are about to have another General Election for heavens sake, they always prime the pumps for that, so yes everything is going to be tickety boo until the votes are counted and then we will be back into a deep recession. So thanks to all the NO voters and they were not all in their dotage. I know of one family with fairly prosperous children who were too frightened to change anything in case THEY suffered. Well how can I put it, they have just about taken all that can be taken from the poor, guess who they will be aiming for next. The Middle Classes have only had a small taste of things to come and I am expecting that all us prosperous pensioners will also feel a great deal more pain.
    In case you are wondering I voted YES but then I have always seen that Scotland would be much more prosperous out of this benighted union, we would at least keep our hands on our holiday money which is presently being wasted on WAR.

  13. nigel says:

    The people decided that the best way to protect their pensions was by voting for the Union.

    No John
    Scots voted no because they haven’t a clue how their country is financed. If they had, they would have voted yes.

    In short, they are thick, and London knows it, which is why they have exploited us for 300 years.

    We are indeed a strange nation.

    1. Dean Richardson says:

      London, or Westminster to be more precise, exploits everybody who comes under its power. It’s Westminster’s way.

    2. JGedd says:

      To be fair, Nigel, I doubt very much that the rest of the UK electorate has any real understanding of how this country is financed. I doubt that many of the MPs understand it either, or so-called economists like Robert Peston, for that matter. It’s why the unionist Scots, as well as the rest of the UK, believes that the UK economy is secure.

      Even when it collapses, as it did in 2008 and will do so again – when the stage magicians can no longer keep the plates spinning – the same army of stage magicians will assure them that it didn’t happen, while they pick up the pieces and hurriedly shovel it out of sight. Unless, of course, they bring down the whole pantomime stage set completely this time…….

    3. MBC says:

      I’m inclined to agree Nigel. I do blame the media though.

  14. richardcain2 says:

    Dickens was born in 1812, so hard to argue that he was a boy in the mid-1800s. Awkward ending to an otherwise sound article.

    1. Kind words, and a fair point about Dickens; nevertheless although I am now in danger of resorting to pedantry, I was trading on the qualifying “at least” the middle of the 1800s, and the looseness of the term “middle”. In 1824 Dickens’ father was slung in a debtors prison and the 12 year old Dickens had to work in a (by all accounts) grim factory. In 1825 there was a financial collapse at the end of a long run of economic problems after the end of the Napoleonic wars (Corn Laws etc). As an adult Dickens wrote about economic problems especially relevant to the crises of the 1840s, but he was deeply affected by his youthful experiences. I thought the reference, broadly considered, worked. Thank you for your comments.

  15. oldbattle says:

    Dear Lord Smith,

    You a Lord and me just a common man
    I am thankit that you let me offer my humble plan
    You see, all I want, your Lordship, as best a can
    In my wee-way to let you try to understand
    How we ‘poor -auld- dugs’ feel in these present days
    And view the future from our humble ways.

    All I ask you is this: ‘gie us mair fuckin po’er’
    No just for MPs an that but fur we, the poor!
    Who live each day and nicht afraid o hunger
    Who fear the comin, cauld dreich winter
    We doan get thousands for sittin on boards
    We doan get 300 a day like youz in Lords
    That is mair than a week’s pension fur me an the wife
    Tae heat, tae feed, ti live half a life
    She still cleans flairs for an extra pund
    I grow some tatties in some stoney grund
    But that is no how man should hae tae be
    Day by day struggle… persistant poverty!

    Its no Fn right! Something wrong!
    It been like this up here too fn long!
    This isnie 1914 wi “Yes Sir fur the shillin, thanks”
    Its 2014 and bloody food banks!
    We want the power tae change awe that
    Real power down here where life is hard
    Power to change the entire equation
    Bring sovereignty tae our nation
    Turn the whole thing upside down
    Gi us a pension o 300 pound,

    Nae House a Lords tae decide for we
    What is needed in Dundee
    But gie the poor power tae mak decisions
    We have ideas! We have visions
    To mak a new Scotland fair, with dignity
    I submit this tae you, wi nae humility!
    But tae Mr Smith in desperation
    Save the poor in this new nation!
    If No? Lord Smith Fk-off
    Leave us.
    Your Lordship Toff!
    PS Do you think today that it is right
    that you a lord, unelected tae shite
    should sit in judgement on our hopes
    and we sit writing you begging notes?
    I wish you luck!
    Otherwise GTFk!

    1. @oldbattle…That was just brilliant. It should be published somewhere and shared around. (with apologies if it already is, first time I’ve seen it though)

      1. oldbattle says:

        Just written! Bella gets first view! Use as you wish.. I was angry!

    2. Thank you for permission to use this, Oldbattle, here is the link to where I posted it, any problems and you want it taken down please just say, no worries.

  16. richardcain2 says:

    My main concern (at the risk of incurring the wrath of all these pro-independence pensioners) is that many people assume that, since the older people who voted No will die off in time, and since younger people mainly voted Yes, all we have to do is wait and Independence will naturally happen.

    I would posit instead that people in general become more conservative (small-C) and risk-averse as they age. They like to stick to what they know. Thus, many people who voted Yes will probably find themselves gravitating towards No as they age.

    There is still a hell of a lot of work ahead, not just to win people over, but to stop the “soft Yeses” from drifting away.

  17. Jim Arnott says:

    As far as independence was concerned we left ourselves as a hostage to fortune.

    Proposing a currency union made it so easy for Westminster parties to say No. We should have said loud and clear we would have our own strong petro-currency as per McCrone and told Westminster if they needed a currency union we might consider it but only on our terms which would have included no share of UK debt.

    Ditto Europe. We should consider EFTA and let the EU plead to have us consider continued EU membership. We would then dictate our terms of membership if WE wanted to continue EU membership.

    Ditto NATO. Let them beg us to join in order to protect the Greenland corridor – but again we would dictate our terms of membership – ie no Trident.

    The most important issue would be to refuse to take a share of UK debt. This would free us from the impending debt disaster that is the UK.

    Incidentally, I am 76 years young and voted Yes. I truly believe we will see independence in my lifetime but only if we don’t leave ourselves a hostage to fortune the next time.

    1. MBC says:

      But we would have needed our own central bank, and foreign currency reserves. Not impossible, but a bit hairy… we run a deficit (as does the UK) and unless we either raised taxes by a hefty amount or reduced spending by a vast amount, we would have to borrow (as the UK does). Interest rates on this borrowing would likely be higher, at least intitially.

      All do-able, but a large number of fearties would be kicking and screaming all the way.

      Eventually though I have every confidence it would have worked out.

      But there would be short term pain, without the cushion and comfort blanket of a currency union. I was up for it.

      1. FlimFlamMan says:

        A couple of weeks ago George Gunn suggested I write something for Bella, and I did begin a piece but it rapidly became ridiculously long. I’ll write something shorter when I have more time.

        Before that though, think about this.

        You describe a situation where a newly independent Scotland issues its own, new, currency and runs government spending deficits. Deficits which, like the UK, require ‘borrowing’. Who do you borrow from?

        We’re talking about a brand new currency that didn’t exist until the new Scottish government introduced it.

        And sure enough this comment started growing as well, so I’m cutting that out and leaving the question. A new government introduces a new currency, and has to run a deficit, i.e. spend more of that currency into the economy than it taxes out of the economy. Where does it get it?

  18. Carol says:

    My parents in their 80’s voted Yes and I am also fed up with some of the comments on pensioners. It falls along the same lines as those relishing homes in Edinburgh being hit by fracking – well as an Edinburgh Yes voting home owner I think people who make these comments are as bad as any pro Union voters. Just stop all the bitterness and work together to get what we want.

  19. andygm1 says:

    Unfortunately, my prediction is that the worse things get in the Union, the more pensioners and fearties will cling to it. As the waters rise, instead of swimming to safety when they had the opportunity, they clambered onto the roof of the building. Now they have nowhere to retreat to.

    1. Nigel says:

      Excellent analogy Andy

      1. MBC says:

        Or refusing to believe the Titanic would sink, because the band played on.

  20. Andrew Skea says:

    A typical article from a Nationalist – moan moan moan – but no constructive suggestions.
    The deficit is too big, the debt is too big, austerity is too severe, everything would have been fine if we’d voted Yes.

    1. I would be grateful if you would identify the statement(s) in my article that claimed “everything would have been fine if we’d voted Yes”. I have checked and cannot find anything of the kind, but I will be happy to retract my comment if you can point me to my error. I do not think anything will be easy; in or out of the UK. The reason for that is what the Union has become.

  21. Unfortunately I feel obliged to point out that your presumption is incorrect; I am not a Nationalist; not everyone who voted Yes was a Nationalist. My starting point two years ago was DevoMax; I moved to Yes because David Cameron rejected the Second Question, and it became clear that Better Together had no intention of offering anything that threatened not the Union, but the hegemony of Westminster. – Better Together was, in effect, a political cartel. As for constructive suggestions, I have written to the Smith Commission and offered my opinions.

  22. John says:

    Pensioners are always going to tend to security, wherever they see it. Working people will say ‘I’ll get a new job.’ Getting a new pension is not really an option for most pensioners.
    Perhaps if we want pensioners to support independence we should be looking to show that security is with the Scottish people and the governments they elect.

  23. bobchronic says:

    I didn’t think that ‘false consciousness’ was an intellectually acceptable theory any more. But here, as in so many other sites debating the aftermath of the referendum, I pick up a widely held view that pensioners were too stupid, too feart, too ill-informed to vote the correct way – YES – in last month’s referendum. Anyone who has ever ventured into a public library will have seen how many pensioners are in there poring over social media to keep themselves informed about the indyref debate – and many other themes as well. What the embittered, pensioner-hating, Lukazcian scribblers have to realise is that pensioners – like everyone else – will vote in their own interests. In any future campaign, there will have to be a real attempt to engage with the concerns of pensioners before any change in voting pattern can be expected. I think I can share a secret with you – people are unlikely to vote for campaigns that insult their intelligence or wish them deid.

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