MoneyMarketing: Thinktank in call to shut state pension 'Ponzi scheme'

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Written by Leah Milner & Helen Pow 

The Adam Smith Institute says the state pension is a “giant Ponzi scheme" that will soon become bankrupt and must be phased out.

Writing for the thinktank’s blog, Tom Papworth calls for the state pension to be phased out by age, so those starting their working life now have plenty of time to make their own pension provisions but those who have less time left until retirement are not unfairly penalised.

He says: “We need to wean people off the state pension. It is a giant Ponzi scheme that sooner or later will become bankrupt. There used to be five working-age people supporting each pension, now there are two and in the future that number will shrink. It cannot go on."

Under Papworth’s proposals, people over 60 would get a full pension, those under 20 would get no state pension and those in between would see their state benefits tapered away at a rate that equals 2.5 per cent a year off retirement. He also calls for the mandatory retirement age to be scrapped.

But Legal & General wealth policy director Adrian Boulding says: “The basic state pension is so important. It is the principle of intergenerational solidarity where you pay tax so your parents have a pension and your kids do the same. I am all for saving more on top of that but that basic foundation level is essential. If there were no mandatory retirement age and if people carried on working, employers would have to discipline those employees out.

“It would be pretty brutal and would mean people will just fall into unemployment benefit so we may as well just continue to pay pension benefits."

Published in MoneyMarketing here.

CNBC: Breaking Down What the Queen Said

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Published on CNBC here.

Daily Mail: Louis Walsh...

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Written by Ephraim Hardcastle

Eamonn Butler of the Adam Smith Institute informs members in his regular bulletin: 'I do sympathise with many of the more honest MPs I know.

They just fell in with a bad crowd. Namely, other MPs.'

Published in the Daily Mail here.

CNBC: This Year's Queen's Speech to Be Very Political?

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Published on CNBC here.

FT: Money and morals: a moral compass in finance

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The final video of the money and morals series is a debate from The Barrowboy and Banker – a pub in London.

Eamonn Butler of the Adam Smith Institute, Giles Fraser of St Paul’s cathedral and Andrew Hill, FT City editor, debate whether we can still trust free markets, and whether the city and bankers need more regulation or a stronger moral compass.

Click here to watch the video.

Published on FT.com here.

FT: Money and morals: not fair to blame the bankers

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In the third video in the money and morals series, Eamonn Butler, director of the Adam Smith Institute, defends the bankers against accusations of greed.

He focuses instead on what he sees as the failings of public policy and "immoral politicians".

Click here to watch the video.

Published on FT.com here.

FT: Muddling through with money and morals

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Written by Michael Skapinker

The call to introduce an ethical spirit into the market has provoked a fascinating debate in this newspaper, on FT.com and elsewhere. On one side are Mr Costa and Stephen Green, chairman of HSBC and author of the book Good Value.

On the other are Eamonn Butler, director of the Adam Smith Institute, and Philip Booth, editorial director of the Institute of Economic Affairs, who argue that capitalism’s problem has not been a deficit of ethics.

Mr Butler argues that the crisis had its origins in US government policies forcing banks to lend to people with poor credit records. Mr Booth wrote that when central banks held interest rates down, asset prices rose and bad risks began to seem good. Mr Butler and Mr Booth assert it is an unfettered free market that encourages virtue and government regulation that destroys it.

Published on FT.com here.

The Independent: Royal Mail faces threat of VAT charges on business contracts

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Written by David Prosser

Royal Mail already faces opposition to its VAT exemption within the UK, with bodies such as the Adam Smith Institute, the free-market think tank, calling for its abolition.

"The Post Office is uniquely exempt from paying VAT on its services, as its would-be competitors have to," Madsen Pirie, the president of the Adam Smith Institute, said last month. "This means that a rival has to be 15 per cent more efficient to compete effectively – most markets are won or lost on much smaller percentage margins than that."

In theory, Royal Mail could be forced to introduce VAT charges from January, when the tax rate returns to 17.5 per cent from the 15 per cent concessionary rate introduced by Alistair Darling, the Chancellor of the Exchequer, on a temporary basis a year ago as the UK slipped into recession.

Published in The Independent here.

Telegraph.co.uk: The BBC: Auntie or Floozy?

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Written by Dr Madsen Pirie

Nobody calls the BBC "Auntie" any more. "Auntie" was an affectionate name for someone who might have been a trifle prim and stuffy at times, but who was basically reliable and behaved herself with decorum. "Auntie" was not the type of person who stayed in Las Vegas hotels, clocked up taxi rides at £200 a time, or who went to town on expensive lunches and dinners.

The revelations concerning the expenses charged by top BBC executives are but the latest in a series of blunders and scandals that seem to beset the corporation. Its image was badly dented by disclosures that it encouraged quiz show callers to make costly calls even after the prizes had already been awarded. Nor was it helped by its handling of the prank calls by Jonathan Ross and Russell Brand, by disclosures that it had made a documentary seem more significant by altering its chronology, or by misrepresenting an apparent row involving Queen Elizabeth.

The bloated expense claims will be taken by the BBC's critics as further evidence that it cannot be trusted to handle the cash it receives from taxpayers with any sense of responsibility, and that ways of funding it alternative to the licence fee must be found. Certainly some of the claims raise eyebrows. The BBC's top executives average over £200,000 per year in pay, with many of them earning more than the Prime Minister, yet some of them still find time to claim 70p parking meter charges. And some of their expense claims bear witness to a lifestyle that most of their licence-fee payers can only envy.

Most people struggle with public transport, making the best they can of buses and trains, yet two BBC personnel between them clocked up over £10,000 on taxi bills over a three month period. The BBC defends this, saying that taxis are "more convenient and cost-effective" than public transport. Most people would agree with this, though unable themselves to spend public money on satisfying that convenience.

The claims may not be as exotic as some claimed by MPs, but the same principle is at stake. The public does not like to see those funded by taxpayers living it up while ordinary people have to struggle to get by. It is seen as a bad indicator when a business organization allows bloated expense claims by its personnel, and the same is true of the BBC. Coming after revelations over the huge sums they pay their celebrities, the public is beginning to think that their money is being passed around in buckets. Greater accountability and alternative methods of funding have just moved higher up the agenda.

Published on Telegraph.co.uk here.

Telegraph.co.uk: Don't bad mouth 19th-century liberals, Yvette, they'd do a better job of eradicating poverty

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Written by Ed West

Because as Eamonn Butler points out in The Rotten State of Britain, 39 per cent of the population receive one or more of the 40 state benefits, up from 24 per cent in 1997. Butler writes: “It’s a huge cash roundabout. Millions of us pay taxes into this system, only to get it back again (minus administrative expenses) in benefits. To manage it, the Department of Work and Pensions employs 130,000 benefits staff, while HM Revenue & Custom has another 8,000 working on tax credits alone."

Publisded on Telegraph.co.uk here.