Lloyd George brought in the first national pension at five shillings a week.
Sir William Beveridge, Berwick’s Liberal MP, tried to introduce a simple, decent state pension based on National Insurance contributions, with no means test.
Governments tinkered with the scheme, made it the most complicated in Europe, and ended up with nearly half of all pensioners depending on means-tested tax credits.
Women and the self-employed tend to get a very poor deal, and people think it’s not worth saving for later life because your savings mean that you lose benefits.
Steve Webb, the Pensions Minister, backed by Iain Duncan Smith, is determined to sort this out. He used to be one of my Lib Dem advisors, and this is his personal crusade. He plans a future state pension of £142.70 at today’s prices based on 35 years’ contributions; carers and parents looking after children will get contributions credited.
In the coming weeks there will be a lot of debate over the details, but we should not let arguments over detail obscure the fact that this is the biggest pension reform since Lloyd George and Beveridge.
If they had allowed their critics to bog them down in detail, they would never have been able to introduce pensions in the first place.
In what may be the first visit by the Chief Secretary to the Treasury to the Berwick constituency in modern times, Danny Alexander had plenty to do. At a crowded meeting in the Jubilee Hall, he was able to announce the Government’s backing for the broadband scheme which local people have helped Northumberland County Council and local Liberal Democrat councillor Stephen Bridgett to take forward. He saw just how valuable broadband is to local business in the countryside when he visited the Lazy Grace company in its converted barn premises, with state-of-the-art technology enabling people to work in a wonderful rural environment.
Then he took a close look at the very serious damage done by the landslip on the main road into the village and was shown how easily much more of the road could disappear down the slope.
And we took him to the A1, a subject on which he has been extremely helpful, pressing the Department for Transport to get ahead with proposals for dualling, which can be considered in the next round of road investment. And he met leaders from business and tourism in the area. But he still found a couple of minutes to call in at one local shop and text Daily Telegraph political correspondent James Kirkup with the message ‘I am in your family toy shop in Rothbury’!
A rock and a hard place
Quite a lot of Northumberland residents lost out because they had shares in Northern Rock, which they had received as members when it originally converted from a traditional building society to a bank.
But, as taxpayers, we all lost out from the collapse of Northern Rock, and the full extent of it has been revealed in a report by the House of Commons Public Accounts Committee.
The collapse and rescue of Northern Rock is costing the taxpayer around £2billion.
The main focus of the committee’s report is the fact that the Treasury in Gordon Brown’s time failed to understand how the boom could lead to a banking crisis, and even more recently did not have the expertise to challenge the management’s business plans and strategy for the rescue and splitting-up of Northern Rock. They say the eventual sale to Richard Branson’s Virgin Money was handled well by the Treasury, but that a lot of skill will be needed to look after the taxpayers’ interest in the rescued banks which are still wholly or partly government-owned, including Royal Bank of Scotland, Lloyds TSB and Bradford and Bingley.
The report is a grim reminder of how much damage was done by the mismanagement of banks. When I read articles by Matt Ridley (now Lord Ridley) questioning whether policies to meet the threats posed by climate change are justified, I cannot avoid the thought that, since he was chairman of Northern Rock when it collapsed, he might reflect that it is better to be prudent and not to assume that everything will turn out all right. Failure to reduce risk in the banks has cost taxpayers a fortune.