States Meeting Transcript - 08/06/2011

STATES OF JERSEY OFFICIAL REPORT WEDNESDAY, 8th JUNE 2011

PUBLIC BUSINESS resumption.................................................................4

1. Pension age: increase (P.58/2011)........................................................4

1. Deputy I.J. Gorst of St. Clement (The Minister for Social Security):.....................4

1. Deputy P.V.F. Le Claire of St. Helier : ...................................................8
2. Deputy M. Tadier of St. Brelade:.......................................................11
3. Senator B.E. Shenton:..................................................................13
4. The Very Reverend R.F. Key, B.A., The Dean of Jersey:...............................13
5. Senator S.C. Ferguson:.................................................................14
6. Deputy G.P. Southern of St. Helier:....................................................15

2. Pension age: increase - reference back proposed by Deputy G.P. Southern ...........21

1. Senator P.F. Routier: ...................................................................22
2. Senator F. du H. Le Gresley:............................................................22
3. Deputy M. Tadier :......................................................................23
4. Deputy T.M. Pitman of St. Helier:......................................................24
5. Deputy I.J. Gorst : ......................................................................24

6. Deputy R.G. Le Hérissier: ..............................................................26
7. Connétable D.W. Mezbourian of St. Lawrence:........................................27
8. Deputy J.A. Martin of St. Helier:.......................................................27
9. Deputy D.J.A. Wimberley of St. Mary:.................................................29
10. Deputy P.V.F. Le Claire:............................................................30
11. Deputy G.P. Southern : ..............................................................32

3. Pension age: increase (P.58/2011) - resumption........................................34

1. Deputy G.P. Southern :..................................................................34
2. Deputy R.C. Duhamel of St. Saviour:..................................................35
3. Deputy T.M.Pitman:...................................................................37
4. D.J. De Sousa:..........................................................................38
5. Deputy C.F. Labey of Grouville :........................................................38

LUNCHEON ADJOURNMENT PROPOSED..................................................39

LUNCHEON ADJOURNMENT................................................................39

6. Deputy P.J. Rondel of St. John : ........................................................39
7. Senator F. du H. Le Gresley:............................................................40

4. Pension age: increase - proposition of Senator F. du H. Le Gresley to refer to Scrutiny ...........................................................................................41

1. Deputy R.G. Le Hérissier: ..............................................................41
2. Deputy G.P. Southern :..................................................................42
3. Deputy M.R.Higgins:..................................................................42

4. Deputy M. Tadier :......................................................................42
5. Deputy R.C. Duhamel: .................................................................43
6. Deputy D.J. De Sousa:..................................................................44
7. Senator A. Breckon: ....................................................................44
8. Deputy J.A. Martin:....................................................................45

9. The Connétable of St. Lawrence:.......................................................46
10. Connétable J. Gallichan of St. Mary:................................................47
11. Senator A.J.H. Maclean:.............................................................48
12. Deputy J.G. Reed of St. Ouen : ......................................................48
13. Deputy T.M.Pitman:................................................................49
14. Deputy P.V.F. Le Claire:............................................................49
15. Deputy J.A.N. Le Fondré of St. Lawrence:..........................................50
16. Senator P.F.C. Ozouf : ...............................................................50
17. Deputy A.E. Jeune : ..................................................................51
18. Deputy A.E. Pryke of Trinity : .......................................................51
19. The Deputy of St. Mary:.............................................................52
20. Deputy I.J. Gorst :....................................................................53
21. Senator F. du H. Le Gresley:........................................................54

5. Pension age: increase (P.58/2011) - resumption........................................57

1. Deputy J.B. Fox of St. Helier:..........................................................57
2. Senator A. Breckon: ....................................................................58
3. Senator J.L. Perchard:..................................................................59
4. The Deputy of Trinity :..................................................................60
5. Deputy A.E. Jeune :.....................................................................60
6. Deputy J.A. Martin:....................................................................61
7. Senator B.I. Le Marquand:..............................................................62
8. Deputy M.R.Higgins:..................................................................63
9. The Deputy of St. Mary:................................................................66
10. The Connétable of St. Ouen : ........................................................68
11. Deputy I.J. Gorst :....................................................................69

2. Salaries over £100,000: process for review and scrutiny (P.59/2011) (re-issue)........70

1. Connétable M.K. Jackson of St. Brelade (Vice-Chairman, States Employment Board): 70

2. Salaries over £100,000: process for review and scrutiny (P.59/2011) – amendment (P.59/2011 Amd.)........................................................................71

1. Deputy R.G. Le Hérissier: ..............................................................71
2. Deputy T.M.Pitman:...................................................................73
3. The Connétable of St. Brelade:.........................................................73
4. The Connétable of St. Lawrence:.......................................................74
5. Deputy G.P. Southern :..................................................................74
6. The Deputy of St. Martin:..............................................................74
7. Deputy P.V.F. Le Claire: ...............................................................75
8. Deputy D.J. De Sousa:..................................................................75
9. Connétable S.A. Yates of St. Martin:...................................................75
10. Deputy A.E. Jeune : ..................................................................75
11. Deputy R.G. Le Hérissier:...........................................................76

3. Salaries over £100,000: process for review and scrutiny (P.59/2011) (re-issue) - as amended..................................................................................78

1. Senator P.F. Routier: ...................................................................78

2. The Connétable of St. Brelade:.........................................................78 The Connétable of St. Mary:..................................................................79

ADJOURNMENT................................................................................80

[9:30]

The Roll was called and the Dean led the Assembly in Prayer. PUBLIC BUSINESS resumption 1. Pension age: increase (P.58/2011) The Deputy Bailiff :

The Assembly now moves to P.58 - Pension Age Increase- lodged by the Minister for Social Security, and I ask the Greffier to read the proposition.

The Deputy Greffier of the Sates:

The States are asked to decide whether they are of opinion (a) to agree (i) that the pensionable age should increase from 65 to 67 by 2031; (ii) that increases in the pensionable age should begin on 1st January 2020; (iii) that the pensionable age should increase by 2 months a year from 1st January 2020; (b) to agree that the number of contribution years (including credited contributions) required for a full pension should increase from 45 to 47 over the time period set out in (a) above; (c) to request the Minister for Social Security to bring forward legislation to give effect to the proposals outlined in (a) and (b) above as soon as possible.

1. Deputy I.J. Gorst of St. Clement (The Minister for Social Security):

For approaching 60 years Jersey Social Security Pension has provided Islanders with a secure foundation for retirement. We should be proud of our pension system. It has the virtue of being relatively simple and straightforward and, let us not forget, it pays out weekly sums that are higher than many other jurisdictions while being funded by much lower contribution rates. We pay Jersey Old Age Pensions of £133 million a year, and that is in 2010. My aim has always been to ensure financial security and decent old age pensions for all in retirement. Hence my commitment to maintain the link to earnings when determining the annual increase in the Social Security Pension. The U.K. (United Kingdom) as well has now restored this link, recognising the value of its pension has been eroded by the link to R.P.I. (Retail Price Index). But the financial sustainability of all

pension funds is challenged by a series of developments that can be attributed to the effects of an ageing population. In summary, it is coming under financial pressure from the combination of an ageing population, increasing life expectancy and a decline in the proportion of working people in the population. Over the last 60 years improved living conditions and developments in health care have increased our life expectancy considerably. We are generally living longer, healthier lives. As a consequence, more of us are receiving pensions for many more years than when they were first introduced. A few figures illustrate this. In 1951 a man reaching 65 could expect to live on average for another 12.1 years to the age of 77. His grandson reaching 65 in 2010 could expect to live for another 21.5 years to the age of 86.5. So people are on average living longer, with the result for example that by 2030 the number of Islanders over 80 will have more than doubled compared with that number in 2010. Of course, this demographic adjustment - and that is how it is referred to by the experts - is on the one hand a cause for celebration; on the other, it creates challenges, not least the funding pressures created by the greater number of pensioners receiving a pension and for much longer than originally envisaged, and despite the incredible increases in life expectancy, pension ages have remained static. The situation we find ourselves in is one that we share with many developed countries, but this does not make it any less serious. It is, of course, made more acute by the fact that at the same time as the number of pensioners is increasing there is an expected fall in the number of people of working age: 4,000 fewer in 2030 compared to last year. Soon the amount of money contributed into the Pension Fund in a year will be less than the sum being taken out to pay pensions, other benefits and associated costs. This matters because the contribution income received in a particular year covers the pensions and benefits paid out in that year. Fewer contributors at a time when the calls on the fund are increasing means that the contributory burden on working age people who pay into the fund now and in the future - that is our children and their children - risks becoming unsustainable. The scale of this imbalance is best illustrated by reference to something that we call the pensioner/support ratio. In 2010 there were 4 people of working age for every pensioner. By 2030 this is predicted to have nearly halved to 2.2, and by 2035 to have declined further to 1.9. As recently as 2005 that ratio was 4.4 to 1. Put simply, many of us are living longer; the amount of money being paid out of the Social Security Fund will soon be greater than the contributions coming in. If we do nothing, the combination of many more pensioners and fewer contributors means that ultimately the reserve that we have prudently built up will run out in the late 2030s. Of course, at this point it is worth mentioning that the impact of these demographic changes on pension funding was acknowledged by the States some years ago when contribution rates were raised above the required pay-as-you-go rate. These actions, raising contribution rates by half a percentage point in each year from 1998 to 2002 has helped us to build-up that substantial buffer fund. But the demographic challenge is of such magnitude that further action needs to be planned now to ensure that the fund can pay all our pensions in the future. The earlier we take action, the less painful that action will be. Of course this situation is not unique to Jersey. Many countries across the developed world are facing the same challenges, as I have said, and a number are already putting measures in place to tackle it, not least the United Kingdom and our sister isle. So I hope that I have defined the challenge, and I reiterate it simply: more money will be paid out of the fund than will be going in, and this is not a healthy situation to be in. The question arising is, what am I proposing that we do about it? I am proposing to link increases in pension age to increases in longevity, so that the pension age will increase as people on average live longer. Of course there has been, and there was, much speculation that I was going to propose an increase to 68, and on a much quicker timescale. However, under these proposals I am only proposing a move up from the current pension age of 65 to 66 by 2025, and 67 by 2031. In other words, the pension age will increase by 2 months a year.

The first of these increases will not take place until 2020. Pensions are a long term issue and this phased approach gives those affected time to adjust their working arrangements and review their retirement plans. Anyone born before 1st January 1955 who is aged 57 or older at the end of 2011 will not be affected at all by the proposed changes. As befits the long-term nature of planning for retirement I have sought to adopt a measured, affordable and fair approach. Extending the pension age will help the long-term viability of the pension fund by increasing the value of contributions; people will be contributing for longer; and decreasing the cost of benefits because on average, if a pension age has not been increased people would have been in receipt of a pension for longer. I am sure Members will be reassured to know that I have not just picked these proposals from thin air. There is a logic to the changes. As I touched on, I am proposing to link pension age to post- pension age life expectancy. This is increasing by around a year in every decade.  My intention is that going forward the number of years for which people can expect to receive the Social Security Pension will be the same as enjoyed by those who reached pension age last year in 2010. I realise that figures in speeches, particularly delivered by accountants, can be problematic, but if I may be permitted to mention a few simply to make my point. In 2010, life expectancy for men reaching 65, as I said earlier, in 2010 was 21.5 years.

[9:45]

By 2031 this is expected to increase to 23.6 years. For women the equivalent figures were 24 and 26.1 years respectively. So it can be seen that over the 2 decades longevity is expected to improve by 2 years. As I am not proposing any move before 2010 the intention is to make up the 2 years in the period between 2020 and 2031. So somebody qualifying for their pension in 2031 at age 67 will receive their pension for around the same number of years, i.e., 21.5 years, as if they had retired at 65 in 2010. Increases in life expectancy are forecast to continue and this should be reviewed again in 2020. I wish that I could tell you that raising the pension age will solve all the funding challenges we are facing. Unfortunately I cannot. Nevertheless this does not diminish the importance of the pension age measures I am proposing. The situation is such that it is inevitable that contribution rates will also have to increase in future to replenish the Social Security Fund. However, my proposals on pension age will reduce the future contributions' burden on those of working age when compared with a static pension age that fails to reflect the increases in life expectancy. The summary information I have distributed to Members illustrates this and also shows the impact on the taxpayer of supplementing those higher contributions. This cost is often overlooked, but as the table shows, increasing the pension age will also save millions of pounds a year in supplementation by 2036. Moves that reduce the predicted increase in expenditure on pensions from the £133 million that I talked about at the start, now to the predicted £229 million in 2036 if the pension age remains unchanged surely must be welcome. Some people have commented that the savings from increasing the pension age are negligible. This to me seems a strange way to describe savings running into millions of pounds a year. It is precisely because I have taken a balanced approach that these savings are not higher. If I had proposed a quicker move to a higher pension age, for example 70, then of course the savings would have been much greater. But people would then have had much less notice of the changes; they would have been working for much longer, and would have had less time in retirement than those reaching 65 in 2010 as pension age would have risen faster than predicted increases in longevity. Ultimately, I have sought a sensible compromise between rises in the pension age and rises in contribution rates. Increasing the pension age will help share the costs of an ageing population between generations, so that the burden, especially through increased contributions, is not borne exclusively by our children and grandchildren. With contribution increases already in the pipeline to fund long-term care, and as part of the F.S.R. (Fiscal Strategy Review), any lessening of the burden must be welcomed by hardworking members of our community. But of course, increasing the pension age is not just about funding issues. Over the last 60 years there has been a seismic shift in the balance between the proportion of life spent in work and retirement. Now up to a third of adult life could be spent in retirement, compared to around a fifth in 1951. I am keen that we draw on the experience, skills and knowledge of older people who have significant contribution to make to Jersey's economy. Such a move is part of a broader picture of encouraging local people to remain in the workforce for longer to maximise economic activity and to minimise the need for increased migration. However this requires a sustainable response that needs a fundamental culture change in

our society that reflects new expectations of individuals and communities in a changing society. Today it appears that when people reach a certain age we are, in effect, writing them off. It is as though they have reached their sell-by date. Instead, I want to give people control over their choices of work and retirement. We must not make the mistake that pension age is the same as retirement age. We need to help people to work for longer. This requires labour market policies that support older people in returning to the workplace while also acting to overcome cultural, regulatory and institutional barriers that restrict the opportunities for older people to work. At the moment the environment is not conducive to encouraging them to carry on working if they wish to. I suspect that there are many people who would like to work for longer, albeit in a part-time role, while drawing or deferring their pension, and faced by the prospect of a shrinking working-age population, the contribution of these older workers is key to the future success of Jersey's economy. A failure to facilitate people working longer may well lead to greater reliance on imported labour, with the associated pressures on infrastructure that this can create. So with more of us enjoying longer, healthier lives, a cornerstone of these pension age proposals is an acknowledgement that people need to be encouraged to extend their working lives. Some have even commented that effectively we are paying people not to work. It is not just about contributing to the economic success of the Island, but about making individuals themselves more financially secure so they can enjoy a more independent, active and fulfilling retirement. In the period before pension ages are adjusted we will have time to examine the specific barriers to people working longer in Jersey. Employers need to be convinced of the economic benefits that can be gained by retaining and recruiting older workers. Tax breaks and flexible working arrangements, for example, should be considered as ways of encouraging people to work beyond pension age. Of course I am aware that concerns have been expressed that some people may face the prospect of working longer even though they are not fit to do so. Whatever age is chosen for the State Pension age, there will always be some people who experience health problems and who cannot work in their current job up to that age, be it those engaged in heavy manual work or a teacher suffering from stress. However, I can offer reassurance that there are already benefits in place that take into account an inability to work. Of course there is long-term incapacity allowance and incapacity pension. These will be reviewed well before 2020 to ensure that they continue and are fit for purpose. This will ensure that the small minority of working age people with significant health problems receive practical assistance to identify appropriate employment as well as financial assistance where necessary. Those on low incomes would also have access to income support. It has to be remembered that employment patterns are changing and many workers will undertake a variety of different jobs during their working lives. Therefore people will also be supported to take on part- time employment or retrain in a different area. Even those currently engaged in heavy manual work who do not make up a large proportion of our resident Jersey workforce often end their working lives in supervisory, driving or office-based roles. Opportunities exist to develop flexible working arrangements that will benefit all groups, but in particular those looking to continue working for longer, but for fewer hours a week, for example. I also want to tackle head-on the concerns that have been expressed that by encouraging older people to work we will be denying job opportunities for the younger generation. At the moment we are indeed striving to find jobs for our young people, but in the decades to come this will not be the case. The same demographics that are creating an ageing population also result in fewer people of working age; so much so that older workers will have an important role in limiting the need for further inward migration, as I have already said. In fact, it is in part to help alleviate the potential contribution burdens on these very same young people that I am proposing these changes to pension age. No change would mean that at a time when they are facing perhaps the greatest financial pressures, they would be paying even greater social security contributions. I have also heard criticisms that I am proposing this move without consulting the public. This is not correct. For the last 3 years my department has suggested a number of questions on pension age that have appeared in the Jersey Annual Social Survey. This survey goes to around 3,200 households selected at random. The latest one was in June and July last year. The response from the public was extremely high, and that is as analysed by the Statistics Unit in their own words, with over 51 per cent of sampled households completing and returning the forms. The Imagine Jersey 2035 consultation held in 2007 and 2008 included a deliberative public conference that explored the issues surrounding the ageing society; working longer was one of the principle issues focused on. The overriding message from the consultation was one of reluctant acceptance that some difficult adjustments will be necessary in the future. I think that that sums up the attitude of many people. They are not keen to see pension age increased, but they understand why it needs to happen. They know that other countries are tackling the issue and realise that we too have to act now. Inactivity on our part will only make the challenges we face harder to overcome in the future, and without restoring the balance between working life and retirement, we place an unrealistic burden on future generations. They will bear the cost of pensioners living up to twice as long in retirement as their predecessors did when the pension scheme was first started. So often the States is criticised for a lack of vision and for not taking difficult decisions. Today we have to be realistic and I do not believe we can shirk our responsibilities. It is no good hoping for the best. There has to be a rethink about retirement. As one commentator described it: "Retirement needs to be seen as a journey, not a destination." I hope Members will agree that the measures I am proposing represent a long-term solution to the demographic challenges presented to our Pension Fund. Changes need to be fair, particularly across the generations. In future we will have to address other important issues including pension provision generally; for example, encouraging people to make greater provision for their retirement; but first of all we have to get the underpinning Social Security Pension right. Changing the pension age provides a firm foundation for the future. We need a pension system that can keep

up with and reflect changes in society, and a rise in pension age is a logical move if we are to create a pension system that is both affordable and sustainable in the long-term and which retains the confidence of the Jersey population, both young and old, current and future generations of

Islanders. In many ways we are now catching up for the increases in life expectancy and population ageing. As the O.E. C.D . (Organisation for Economic Co-operation and Development) noted, retirement used to be a luxury enjoyed only by a few; now it is an expectation for the many. However, it has to be paid for and the cost of longer lives has to be spread between the generations to ensure the financial sustainability of our Social Security Fund. If we are not prepared to increase the pension age we shall simply pass an ever greater and, in my view, frankly unsustainable burden on to our children and grandchildren. We need to discharge our responsibility to future generations. Sir, I maintain the proposition. [Approbation]

The Deputy Bailiff :

Is the proposition seconded? [Seconded] [10:00]

1. Deputy P.V.F. Le Claire of St. Helier :

I do not think it is the right time for us to be agreeing this proposal, although there may be merit in doing so in the next 2 or 3 years. I certainly do not believe that the consultation has been significant enough to warrant bringing this forwards and it is interesting for the Minister to talk about what the States Statistics Department has said about a Social Survey that goes out to 3,200 people and the results of that being 51 per cent. Then, ahead of that, in his speech to talk about the experts' expression "the demographic change", and we have all known that the demographics in relation to Jersey's future have been set out by many predecessors. I have great confidence in the Minister for Social Security. I think his professional abilities have brought much benefit to the position that he is in, however, with the greatest of respect, I would refrain from supporting him on this occasion because I believe that we need to look at the census. If you look back - and I have been looking back and I will be bringing it out in future debates - there have been so many instances, beginning with Senator Ozouf when he was a Deputy in charge of Etat Civil beginning the first census asking questions to the then Minister for Housing, Senator Le Main, who I think at the time was a Deputy : "Are you going to base your housing policies on census information?" "Yes, I am." "Is it not right to base your housing policies on census information?" "Yes, it is." Prior to that, in fact, yesterday I received the document on population that referred to the census of 1986, I think. So, looking back over the minutes of the States and into the population issues and statistics that I have been doing, I am absolutely completely convinced 100 per cent that everybody else in every preceding States Assembly has seen the need, including the Minister for Treasury and Resources, for us to base our proposals upon sound information from the census. Now, I have been to see the Head of Statistics and it is cognitive bias that is really annoying when it is used in this Assembly, and it is used very often, when we say, for example: "There is not a migration population issue; we have got it under control because we have set our States Strategic Plan at 150 heads of households." Well, yes, whoopie woo, we have said that I am going to win the lottery; but it is not necessarily going to happen. One hundred and fifty heads of households corresponds to 325 people a year. Over the last 4 years there have been 700 inward migrants over and above births and deaths, so to suggest those inward migrants are not going to be in the very, very large majority, pensionable people in the near term .. our problems have derived, according to the Head of Statistics, because of the 1970s influx of the baby boomers on top of the baby boomers and the large migration of people that came to the Island of middle age at that time, driven by the tourism industry and the arriving new finance industry. Now, if we look at demographics and we think we trust the experts that demographics are what we should base our principles upon, then we really need to base those demographics and those population models because as I said before in an E.i.P. (Examination in Public) recently, the population model will work - the States Statistics Department has developed one - it will work on any number we put in, even the real one. If you punch in the real numbers - and Imagine Jersey we had 325, it was a very interesting number because it kept us below a headline figure of 100,000 and I have sent this in emails to Members - they will see that

700 a year, whether or not we continue or whether or not we adjust it on a 5-year, 3-year self- adjusting average, 5-year rolling average, whether or not we achieve that is neither here nor there. The fact is that for the last 4 years we have not been achieving it. So, for the last 4 years on average it has been 725 people a year coming into Jersey. I am going to go on to argue other points about this in a minute but let us just deal specifically with the demographic argument there. The facts at present and the issues that have been drawn up are based upon old data and, while I do agree with the Deputy of Trinity as the Minister for Health and Social Services that there is certainly a silver tsunami coming in relation to need, there is a whole body of work that needs to be considered about the provision for those people in accommodation, sheltered housing, et cetera, and whether we rack up the age of people who can access sheltered accommodation from the age of 55. In the newspaper recently we saw, from the Minister for Health and Social Security's consultation, that unless we do something to address these issues, we are going to see a hospital that is not going to be capable of delivering emergency services because it will be stacked with old people. Maybe this is a plan to keep them out of hospital and in the workforce, I do not know, but certainly when we talk about incentivising people and motivating people I think we need to get away from Imagine Jersey and get away from our imagination and look at reality. Imagination is a wonderful thing but so are facts. Facts are more important and, as I said, I will bring it out in documents for Members to see in future debates and I will place them before Members to see the words of people like the Minister for Treasury and Resources who based his Etat Civil census most importantly squarely at the feet of the Minister for Housing's plans for the future. We need to, with the greatest of respect to the Minister for Social Security, put this aside until the census information is there for us to revisit. Now it may not be supportive but this is my view, for what it counts in this Assembly, as much as the public's.

Deputy I.J. Gorst :

I am not sure if the Deputy would like me to address that issue .. Deputy P.V.F. Le Claire:

Not really, Sir, I would like to continue and then the Minister can .. The Deputy Bailiff :

You will have your chance to respond to everyone at the end, Minister. Deputy P.V.F. Le Claire:

Much of his speech was driven around: "If we do not do this, we are going to have more inward migrants" but we have got a policy now. The Chief Minister .. oh, one minute, where is the Minister for Planning and Environment? He is meeting the Ambassador for China. Senator Ozouf has just come back. The Minister for Economic Development has just come back, Senator Maclean. Senator Cohen has just come back from Israel. Drumming-up business; the Far East, India, Near East, all of those places where they can drum-up business and perhaps after them we need the business. We do need the business, so they are doing the right thing, but that is a policy of growth; the policy of growth to maintain income, to maintain our finance industry, to keep people in jobs is what is going to give us the revenue we need to go forwards. We are talking about pensions and I think the vast majority of the public, although it does not get you elected by saying this, would like us to see us doing something about a final salary pension scheme and pensions across the board and why the taxpayers and the limited amount of revenue to maintain the pensions that we have .. and, okay, we do have a good pension scheme and, yes okay, we do pay less than other people, but we have a lot less other things as well. We have less home ownership in Jersey. We have identified in this last .. I have been identifying but luckily, just out of pure fluke at the same time, my timing ran in tandem with the U.K. who issued many reports this week. I have sent them to the Minister for Treasury and Resources. Those significant reports, commissioned by the Halifax and other people, highlight the issue of home ownership in relationship to pensions, and the fact that if young people are not able to access a home, they are less likely to be able to support themselves in pensionable years. There has been nothing saved up; it will all be in the toilet and flushed away every week or every month as rent. If they are in private accommodation and they do not meet the social housing need, which is ever-increasing at the moment, then that will be going to somebody's pension in the U.K. through share transfers. Share transfers last month were two-thirds of flat sales. Two-thirds of all flats sold in Jersey last year, certainly last month, by share transfer .. two-thirds of flats sold last month were by share transfer. Now those could be arguably pension funds from the U.K. We talk about incentivising the old people to work; my Dad is 78, I think - he is getting on - he was here during the Occupation as he reminds us; a local boy; De La Salle- educated; worked at the harbour all his life; he really gets irate when he goes out or when he was going out working, doing a little bit of work on the side, and then got taxed on the pension that he received as part of an income. I have mentioned this before and he makes great play of repeating the story to me on occasions about the time he phoned-up Senator Le Sueur and ticked him off because he did not like the fact that his pension which he had paid tax on was again being taxed as part of an income. If you want to incentivise the old people to work let us do that. We talk about regulations and cutting red tape; we have already removed from the head count of the manpower allocations any need for companies to assign that head count to an elderly person. They are not in the mix of the companies' head count so any company at the moment can employ people, set aside from their head count, that are past their pensionable age. "Is that true?" the Minister is asking me. Well, it is true and that proves my point; the Minister really needs to sit back a little bit and, with the greatest of respect, get a little bit more information. Employment patterns are changing and so are, as I said, people's will to be part of the system. The younger people these days would far rather play Nintendo, take a small amount of money and head down to St. Ouen when the surf is right than go and find a job. In the changing marketplace, where there are no private pensions available and where there are no job opportunities or restricted job opportunities and high levels of unemployment and low levels of home ownership and low levels of those dreams being achieved in Jersey and having a successful life or a family; unless they are lucky to walk in on the back of a (j)

cat, they are minded to say: "Well, this system is not working for me and I am not working for it." Deputy R.G. Le Hérissier of St. Saviour :

I thought that was a slur on the young generation. What percentage of people are rushing of to St. Ouen absenting themselves from work in a deliberate fashion. [Approbation]

The Deputy Bailiff :

Just a moment; the Deputy is not giving way. Deputy P.V.F. Le Claire:

My point is that we should not be keeping those young people from gaining and experiencing the jobs that they dearly wish to have. They all want to have a better life. They all want to have a good job. They all want to have a home, but by keeping people, I am arguing, in work longer at the top end, we are blocking their entry and we are blocking their aspirations and we are giving them those other jobs, in my view, that many of them do not want. I do speak to younger people and many of them are working but many of them are not working in jobs that they like, particularly. It does not mean to say they are all going to St. Ouen surfing, Deputy Le Hérissier comments to me - and that is absolutely correct - but I am trying to give a flavour of what I think is wrong with introducing this at this time and if Members take me literally they will be tripping me up all the way to the end of my speech, which I do not intend them to do. A lack of vision; the Minister says that this Assembly suffers from a lack of vision and not taking difficult decisions. I am sorry, this is not a difficult decision. This is an easy decision to take if we have clear vision but what is making it difficult for me today is that I do not have certainty from the census and I would like to see a more robust set of information and I would also like the Minister to recognise that the numbers that he is working to, as with our Island Plan - 150 heads of households - has nothing to do with reality. It is a fantasy. There are 325 heads of households coming in; not 150. So this demographic chart and this Island Plan proposal and all of the rest of the proposals that Ministers are staking their claims to look good at election times and makes them look all green and: "We are managing migration, we are managing the economy, we are managing the environment, we are managing everything"; well, we are if we look at our fantasy numbers in our imagination. If we sell them our imagination everything is working, but do not let them peer behind the curtain and see the reality where we are failing in all areas. So, there, we have heard it from me. I will just check to see if there is anything else I can say, hopefully not upsetting any more young people or Deputy Le Hérissier. [Laughter]

Deputy T.J. Le Main:

Hurry up, I want to go home. [Laughter] Deputy P.V.F. Le Claire:

You see, Senator, the man wants to go home and if he had retired a few years ago [Laughter] .. Interestingly, I sent an email to the Minister for Social Security and I stand to be corrected but I believe it was Kaiser Wilhelm III who introduced pensions and pensionable retirement age .. Bismarck, was it? Yes, Bismarck, so [Laughter] .. I should have asked an historian. I will give way to Deputy Le Hérissier here.

[10:15]

The Deputy Bailiff :

Can we go back to the ordinary rules of debate? Deputy P.V.F. Le Claire:

Bismarck introduced the retirement age because in the Assembly where he was trying to get things through there were too many people of advanced years that were blocking his proposals so he brought in a retirement age and got rid of them all. So Senator Le Main can go home and so can I.

2. Deputy M. Tadier of St. Brelade :

I will try to follow that. We have got a choice here today; we can have a scenario where .. sorry, I will wait for Members to leave and then [Laughter] .. have we still got enough to carry on for today? It is obvious Members are taking a break now because they are not sure whether they are going to get those 2 years later on in their life so they are making up for it. Getting back to a serious point; I think we are faced today with a choice here. The current situation we have the years 65 to 67, which are the best years of retirement or they can also be the hardest years of work. I think that is fundamentally what we are looking at today. We have heard lots of arguments about the economics of it, about statistics, about averages, which I think fail to take into account the very real circumstances that real people in Jersey find themselves in. I am going to talk in a moment about those averages. I did find the comments of Deputy Le Claire about young people incorrect. I do not think that they are all sitting around playing Nintendo or heading to St. Ouen ; in my opinion they much prefer to play PlayStation and go to St. Brelade's Bay, which is much a superior beach. Seriously though, I think it completely misunderstands the strong work ethic that I think people in Jersey have right across the board, including the many young people I know who do work hard, often in jobs that are not particularly well paid. They struggle to find work; often they take jobs that are not necessarily their first choice. Of course, like all of us, they do value their leisure time and I do not think that is a bad thing either. The problem with looking at averages and when we are talking about the increase in life expectancy; sure, life expectancy has gone up in recent years because we live in a more affluent society. We have had medical advances. But the trouble with looking at averages; it does not take into account the differences in social background. I would

contend that people in easier jobs with shorter working hours are necessarily, on average, going to have longer life expectancy than those who are working in very physical jobs, who come from poorer social backgrounds - and the statistics bear this out - that are not having good diets, and that are not exercising in a meaningful way because they do not have the social and leisure time. These people, some of them, will not even make it to retirement age. Now part of the issue, of course, in the system is that it is completely topsy-turvy. On the surface of it, it looks like a fairly progressive system; everybody pays in, those who earn more seem to pay more and everyone gets the same pension at the end of the day. Of course that is not quite true; we have socialism but Jersey-style socialism where those in the middle .. so if you earn up to roughly £45,000 your contributions are capped, anybody who is earning a lot more than that is paying relatively less in terms of their income to what they get out for the same pension. So it is again Jersey-style; the middle-earners funding those at the bottom, and I think there must be a better way to do this rather than simply looking at raising the retirement age. There is also a flawed presumption, in my opinion, that life expectancy will continue to rise exponentially. I have mentioned that we are facing certain medical crises which are not necessarily targeting the population right across the board but things like obesity, things like other work-related stress, in particularly high-stress jobs, for example, to do with physically stressful driving, manual labour. One comment, which I found particularly strange, is that the Minister said that there are very few people who do manually arduous work. That is not from my opinion, and heavy manual work is not simply about heavy. If you are climbing ladders all day, if you are kneeling down doing the pavements; that is not particularly heavy work but it does have a massive impact on one's knees and my concern is that there has not been any analysis of those individuals in these types of jobs. It can apply to office jobs. Of course there are some office jobs as well which are very stressful in a different way, because people are not getting any physical exercise. They are sitting in front of computer screens all day and they are getting completely different physical ailments, which are related to a lack of exercise. Now these individuals are not going to have the same life expectancy. It is not true that they all end their jobs - those in heavy jobs - in back office jobs. In fact, that is completely not the case. Most of the time they just wear their bodies right down to the ground, they cannot wait to retire. If you talk to your average manual worker the conversations when they get to 55/60 are: "I cannot wait for another few years and I am retiring"; that is all the conversation centres around. I do not think enough research, enough consideration, has been given to this section of society. I think it is absolutely true that there will be a knock-on effect for younger people in employment. We know that we already have a problem with youth employment. The increasing unemployment statistics are predominantly made up of the youth. There is a massive issue there. One of the ironies of course, it would seem to be sensible to increase the contribution age from a younger age to ask people to start contributing at a younger age rather than a higher age. That is not possible, of course, but there is another inherent contradiction in the system insofar as people who do not have children, once again are generally subsidising those who do. That is not a problem; that is the way things work, but maybe there could be consideration to some kind of fund being set up where people who have children have to start contributing to social security from the moment that those children are born. That is probably slightly too radical, but there are solutions which can be

brought to the table. The other underlying problem, I think, is just to do with the current nature of society and the ideology that we have of growth at all costs. There is an issue of growing the population but there is also an issue of the economy continually growing so that payments that have been made into the system do not keep up with the cost of living in real terms. The point is, if we are buying-in to the system of growth at all costs and that growth is the only way that we can win, we are buying-in to a system of spiralling costs where whatever you pay into that system is essentially never going to make the money because the interest that you will get is never going to keep up with the R.P.I. So, growth is part of the problem. I think, if we really want to tackle the underlying issues we need to look at the way society works, our economic model. I think those are my main comments. I think that not enough research has been done into the demographic breakdowns and the unintended consequences that will arise from what seems on the surface a fairly innocuous proposition. I think there are inherent inequalities in it that have not been addressed. I do not see that there has been a vast amount of meaningful consultation. Of course, this is always a problem in an island where people are not immediately willing to engage for various reasons, partly because they work so hard. The other consideration is to say that in Jersey, in the U.K., like countries such as Japan and the U.S. (United States), we already work longer hours than most of the world. We are already spending a lot more time of our lives working and if you compare it to somewhere like France or the Scandinavian countries; the working week itself is lower. So, in real terms the amount of work that any individual is doing throughout their whole lives is already far above many countries or most countries that we are trying to make comparisons with in the world. We also have a higher retirement age, or it will be. So, I think those considerations have got to be taken into account. I cannot support this, I do not think there has been enough research. I do have to make one criticism, not of any States Members, but I have been very surprised at the way there has not been any particular reaction first of all from civil society, from lobby groups and I would ask, because I know they will be listening, where have the union representatives been on this? We know that when such propositions were brought in France, even with France's - and I will say it - very generous social security arrangements - probably too generous to be able to sustain their economy - we saw a massive cross-section of society taking to the streets. There was leadership shown there. I am saying if this proposition does go through today I do not expect any union reps or any members of the union to come to me and say: "Is it not absolutely terrible that this has gone through the States?" when there has been no leadership shown in the way it should have been. I know there were various reasons for that, that is not to say they would support this proposition; clearly they would not but all I would say is that blame cannot simply be laid at our door if this goes through. I hope that other Members will agree that not enough information has been given to us and there may be actual cause for further scrutiny at some point or possibly cause for a reference back.

3. Senator B.E. Shenton:

This is just a short question rather than a speech. I would like the Minister just to give some confirmation of what is happening with the P.E.C.R.S. (Public Employees Contributory Retirement Scheme) public sector and teachers' pensions and whether the retirement ages on those pensions would also be increased because I would hate to think that today we are only raising the retirement age for people who do not work for the Government.

4. The Very Reverend R.F. Key, B.A., The Dean of Jersey:

I make no comment on the wisdom of this proposal, although it is of course a debate that is being had all around the world. It does seem to me that there are one or 2 ethical points I wanted to lay before this Assembly. The first is that it is a mark of a civilised and compassionate society, both to care for its older members but also to provide them with a maximised opportunity to live until they die; not simply an existence but if the older folks also want to go surfing at St. Brelade or St. Ouen that should be something that is open to them. Secondly, it seems to me that it is an absolute mark of a civilised and compassionate society that we do not burden our children because we were afraid to make decisions. I think that is right about having a debt-free society. I think it is right about making sure that tax and social security contributions are at reasonable levels; that is to say to make sure that we say: "Well, we could not afford to pay that but we rather hope that they will be able to." However, it does seem to me that there needs to be a level playing field in the employment market. If you are the Dean, unless I really do something to upset Her Majesty profoundly, I could if I wanted to, make it so that she was saddled with me until I am 70. It seems to me that if you are a Member of this august Assembly, providing you keep winning elections you can stay until whenever. However, that applies to many other professions as well. [Laughter] If you are a shop assistant, and this was said to me just the other day, if somebody wanted to extend their working life, they went to a particular shop - I do not know its name - and there was a vacancy advertised. They turned up and said: "Well, okay I would like to take the job" and they said: "No, we could not possibly have somebody of your age working here; you are far too old." Now, if we are going to ask people to work longer then we must provide an employment culture in which that happens, and it seems to me we must do that without any excuse about Jersey is too small so normal rules do not apply, that has to be the way it is. I was glad to hear the Minister say that an eye would be kept on

regulation because it does seem to me that there are occasions where cultural change by persuasion may fail and cultural change by regulation must be the safety net to make sure that those we are asking to work longer have a fair opportunity to do so.

[10:30]

5. Senator S.C. Ferguson:

I think I will probably bring a bit of balance to this because a number of Members - well, 2 Members - have been decrying the Minister for daring to suggest that the retirement age should be increased over the next couple of decades or so. I was thinking about this last night and I wondered who picked the 65-year age limit for men and as Deputy Le Hérissier, the fount of all knowledge, has said, the age was selected as the time of retirement by the Iron Chancellor, Otto Von Bismarck of Germany. According to my version - Deputy Le Hérissier may have a different one - he introduced a social security system to appeal to the German working class and to combat the power of the Socialist Party in Germany during the late 1880s. Somewhat cynically, he knew that the programme would not cost very much because the average German worker never reached 65 and many of those who did lived only a few years beyond that age. Now, when the United States passed its Social Security Law in 1935, the average life expectancy in America was only 61.7 years but they stuck to 65. But why 65? Apparently Bismarck thought the age of 65 was a reasonable compromise as this was the age at which most old soldiers died and, out of interest, Bismarck lived until he was 83 so I expect he was collecting his pension for quite a long time. Now, Beveridge in the U.K. produced his report in 1942 and it was brought into force by the Labour Government after the Second World War but had been approved by the Coalition Cabinet during the war. Forgive me for going back into history but to see where we are going, we do need to know where we have come from. Beveridge came out with 3 principles. The first was that it was appropriate that in 1942 in the middle of a World War he felt that at a revolutionary moment in the world's history it was a time for revolution not patching. He maintained that the organisation of a social insurance is

only one part of a policy of social progress and the other parts to be tackled - sadly, I think they still are - are disease, ignorance, squalor and idleness. His third principle was that social security must be achieved by co-operation between the State and the individual. The State should offer security for service and contribution. I do not think he intended to include a benefit dependency culture. The State, in organising security, should not stifle incentive, opportunity, responsibility; in establishing a national minimum it should leave room and encouragement for voluntary action by each individual to provide more than the minimum for himself and his family; definitely not a fan of the benefit culture. But very interestingly he says - and this is in 1942, that is 69 years ago - the provision to be made for old age represents the largest and most rapidly growing element in any social insurance scheme. So what is new? Beveridge took 65 as the retirement age, and I cannot find any rationale for that choice except the U.S.A. had taken that age, copying the Germans and the Germans based it on the life expectancy of an old soldier, and the mechanics of the system proposed by Beveridge were based on the New Zealand system and we have, to some degree, based our systems on the U.K. What all this boils down to is that we are quibbling over a 2-year increase in a statistic which was derived by a rule of thumb of a somewhat despotic Chancellor of Germany in the 1880s. Is this sense? We are talking of a proposed increase of 2 months a year, beginning in 9 months' time, in 2020 and culminating in a 2-year increase in pensionable age by 2031. By 2031 the life expectancy of a man born in that year will have increased from 79 for someone born in 2011 to 81.1 years born in 2020 and 82.7 years born in 2031; so we are talking an overall increase in life expectancy of about 3.7 years. My figures may vary slightly from those quoted in the Minister's proposition as I have used the Government Actuaries' tables of life expectancy at birth but the overall thrust is the same. Now a man born in 1911, 100 years ago, had a life expectancy of some 50 years. We may even see significant changes in the next 100 years due to medical advance but I think that the graph is levelling off. I do not expect to see the significant changes but, on the other hand, in 100 years' time it is quite possible I may not be here to see it and some of you may say that is a good thing. [Laughter] The Minister has taken an eminently sensible approach to

dealing with the situation. As one of the senior - and I use the word advisedly - Members of this Assembly, I refuse to consider that I am a problem, unlike those who speak of the problem of the ageing population. I do, however, intend to live long enough to be a problem to my offspring. I do wonder - oh, I am sorry it took so long for some of them - if we do not need to do more now. The Dean has mentioned the problem with the employment culture. Currently companies see the 65 age limit as a carte blanche for throwing - and I class myself as one of them - "oldies" out if they are men, and 60 if they are women. If we do not address this then we could end up with people being required to retire but with a gap between retiring and receiving their pension. This is not a good idea. The Minister says this must be addressed and I would appreciate his comments on how to do that in his reply. In this age of equality we should also be planning for the increase of a woman's pensionable age to be raised to that of their male counterparts. This has already commenced in other countries and we should be doing the same. The Minister, in his report, says he wants to revisit this in 2010 but I think it needs to be done sooner and as the report says: "We are not doing enough to draw enough on the experience, skills and knowledge of older people" and, as the Dean so eloquently put it: "We employ Jurats until they are in their 70s." There is no sold-by date for Connétable s or Members of this Assembly or even the Queen. What is wrong with utilising the wealth of experience of the older generation? This is a carefully thought-out and sensible start to modernising our social security system with a long transitional period. I will certainly be supporting the proposition but with the rider, we need to do more and sooner rather than later.

6. Deputy G.P. Southern of St. Helier :

Can I inform Members that at the end of my speech I wish to propose a reference back for this proposition seeking further information.

The Deputy Bailiff :

The purpose of the reference back is to seek more information. If you need more information it is hard to see why you should want to speak before you get it.

Deputy G.P. Southern :

Because I wish to make the case for making that reference back. The Deputy Bailiff :

Then make your reference back but do not speak to the proposition. Is that not the way you look at it? The purpose of a motion for a reference back is to get more information in so that you can then address the proposition. If you can address the proposition without having the information I cannot quite see that you would then, at the end of your speech, make a proposition for a reference back. If you want to make the proposition for a reference back I would have thought the time to do it is now and if you are successful then, of course, you get more information ..

Deputy G.P. Southern :

I will make a speech which has the intention of proposing a reference back. Is that satisfactory? It is a long time since I have done a reference back. It has been 9 years and I have forgotten.

The Deputy Bailiff :

It is your choice, Deputy . I just express the view that if you made your speech on the substance of the proposition then Members may think when you try and get a reference back at the end that you did not need the reference back because you have made your speech, but it is a matter for you.

Deputy M.R. Higgins:

With respect, some of us would like to hear him. Deputy G.P. Southern :

All right. Thank you for the advice. I want to start with the opinion column of the Jersey Evening Post of 3 nights ago now for 2 reasons. One, I absolutely agree with it and that is a rare thing. Occasionally they agree with me. It starts off: "Tomorrow the States will debate a matter of outstanding interest and importance to a great many Islanders." "Outstanding interest and importance." In the final paragraph it goes on: "It is legitimate to ask if tomorrow's debate is premature. The pension age proposition having been lodged only a few weeks ago, arguments for and against the proposal will, of course, be aired on the floor of the House but can we be sure that Members have sufficient opportunity to consider the complex issues involved to sufficient depth?" The answer to that question, I believe, is no. When I walked into the Assembly this morning I heard a relative newcomer to the House asking a Minister: "Where is your Green Paper?" and I put that to this Minister for Social Security: "Where is your Green Paper?" because surely if anything affects every member of our society it must be pension age, and that is a singular important issue that must be debated properly, it must be debated in an informed way and public opinion must surely be sought properly of that. Yet, where is the Green Paper? It has not appeared. I refer Members to the guidelines on consultation and it says: "Major policy decisions affecting a broad cross-section of the community will need to be the subject [need to be the subject] first of a Green Paper and subsequently a White Paper." Is this a major decision? Absolutely. This affects the working and retirement lives of every person on this Island. Where was the Green Paper is the first question. Where is the consultation? In his speech the Minister for Social Security gave scant regard to that consultation process. He said it has taken place. I looked in his paper - 34 pages long - for the word "consultation" and I finally came across it on page 13. It is contained in one paragraph, one single paragraph of the entire paper dealing with consultation, Jersey public opinion, where it says: "Over recent years various questions have been asked through the Jersey Annual Social Survey and Imagine Jersey 2035 to gauge people's reactions to different measures to tackle the funding challenges facing the Social Security Pension. Reducing the value of the pension is regularly the least popular opinion, while removing the ceiling or increasing the level of contributions are viewed as more acceptable, if a change has to be made. Raising the pension age is somewhere in the middle." So, is it the overwhelming top of the chart in people's opinion? In the scant consultation that has taken place, no it is not. It is somewhere in the middle and I will come back to somewhere in the middle in a minute. When faced with a specific challenge to address the Island's funding pressures, in 2035 workshop participants all included an increase in pension age as one of the measures that would need to be taken. Why did every member of that consultation process or that workshop - and I was at that workshop - and believe you me there were a lot of people saying: "We should make people work longer" but they were retired. It was a daytime consultation; a great proportion of the people there had already retired so what they meant

was .. and I will not take interruption again from behind me. I am on my feet. [10:45]

Senator P.F. Routier:

Would the Deputy give way a second?

Deputy G.P. Southern :

No. No.

Senator P.F. Routier:

It was just really what day the consultation was on.

Deputy G.P. Southern :

A significant proportion of that meeting were retired and what they were saying was: "I am retired, let other people work longer; that is all right." "The options for change are discussed further in the next section." "The options for change are discussed"; information of the options is not given. The Minister has decided to approach it in this way. As the Dean has said, enforcement should be the

fallback position. A voluntary opportunity to work longer should be the starting point and again we address that. So, proper consultation has not, I believe, taken place. The 34 sides of this report have references to consultation taking part in Imagine Jersey 2035 - already mentioned - Jersey Annual Social Survey 2009 and 2010 and will examine those results and in Keeping Jersey Special. Well, Keeping Jersey Special - I do not know if Members remember it, I have still got a copy of it but it was bequeathed to us by Senator Walker as he retired from his Chief Ministership - covered a wide range of things, only one of which was funding pensions and the ageing of the economy and simply referred back to Imagine Jersey 2035 as a starting point and made the statements that a consistent view from the public reinforced by the participants of Imagine Jersey 2035 has emerged. "The countryside should be protected and houses should not be built on greenfields." Fair enough. "The economy should be grown to become more productive. They would be prepared to work longer and wait longer for their States pension." "Would be prepared to work longer"; this reluctant admission that perhaps we might have to is different to raising the pension age. "They accepted they may have to pay more for certain services." "Pay more"; an option. "They accepted a limited level of inward migration is necessary." Look how wide-ranging that was; a reference back to Imagine Jersey 2035 in July of 2008. That is not a consultation document, nor does it contain detailed information of what we need. So, let us have a look at those so-called consultations and here we have Imagine Jersey 2035 - a sad life I lead; I keep these things - January 2008 and on page 15 here we have: "Please rank the 4 options most acceptable and least acceptable. Growing the economy: 60 per cent most acceptable. Working longer: 20 per cent most acceptable. Resident population pays more: about 28 per cent most acceptable. Allowing more people to live and work in Jersey: 50 per cent. Working longer: 20 per cent. Why did people refer to working longer? Because they were asked to refer to working longer. Did they find it acceptable? No, it was the least acceptable. The least enthusiasm and the measure of that, when you consider these options across the board ranking them, growing the economy came out with a score of 2.8 per cent, working longer 1.6 per cent compared to 1.4 per cent and 1.2 per cent, just above the lowest ranking. Please rank number 1 to 4, 1-point-something; so either last or next to last on the options. No great enthusiasm for working longer. So we turn to the Jersey Annual Survey. This is 2010, the Minister referred to it and we have got again 2 questions in the main, on pages 78 and 79 of this survey. In figure 11.2: "Which of the following would encourage you to work beyond normal pension age?" Listen to the words "encourage you to work beyond normal pension age." The Minister himself said: "We must encourage people, we must assist people to work longer. We must provide the opportunity for people to work longer. Those are all enabling; this is compulsory." The starting point here is not enabling, it is enforcing. It is raising the pension age. It is the stick and not the carrot. Where is the carrot in these propositions? It is not there. It is vaguely in the report; it is not in the proposition and, as we know, what we vote on is the proposition. That is what we are going to do if we pass this today; we are going to accept the pension age will rise to 67. In order to stop that we would have to rescind what we had passed today if we pass it, and I am suggesting we should not because it is the wrong approach. So; encouragement to work longer, higher value pension if you retire later. Well, that is a jolly good idea; that would offer encouragement to either a great encouragement or some encouragement to 74 per cent - three- quarters - of the population. Why are we not doing it? Why is it not in this proposition? We are going to do it sometime over the next decade, perhaps. "Retraining to change jobs"; appealing to 40 per cent of the survey. "A less physically demanding job"; again appealing to 45 per cent. "A less stressful job" - and Deputy Tadier mentioned that, that a stressful job is not necessarily physically stressful – 57 per cent: "If I had a less stressful job I might work longer." "Opportunities for part-time working or job-sharing"; over 60 per cent encouragement. "Extra tax breaks for wages earned beyond normal pension age" - ah, that is looking more like it – 65 per cent. So what we are talking about and what was surveyed were encouragement, opportunities were what would help you decide to work longer. No mention of compulsory pension age. Here we come to the 2010 questions. "If you are below the age of 65, to what extent do you agree with the following statements?" Now, listen carefully, how reluctant is this? "I would like to continue beyond the age of 65", 28 per cent agreed, slightly or strongly with that so just under 1 in 3. "I will need to work beyond the age of 65 to maintain my standard of living", I will have to work numbers 48 per cent, practically half. Here is the reluctant admission; it is economic: I will have to. "I would like to find a less demanding job as I get close to pension age", 27 per cent, 33 per cent, 60 per cent. Six in 10: "Yes, you could encourage me to work longer; I would need a less demanding job." So, no question; nobody has been asked: "Would you accept the raising of the pension age?" "You cannot get hold of your pension until you are 67. Should Government do it?" Nobody has been asked. Then we come to the 2009 survey where we have a question. "How acceptable or unacceptable are the following options in terms of funding the pension. Making any earnings over £42,000 subject to social security contributions", and we are starting the move towards that. Is that acceptable or unacceptable? 52 per cent say it is acceptable so a large measure of agreement with that. "Increasing the percentage paid in social security contributions", 38 percent find that acceptable. So 2 in 5 saying increase contributions to pay for the pension. "Increasing the age at which the full pension is paid", 32 per cent. Again, back down to 1 in 3 saying that is acceptable. "Means testing the pensions", 28 per cent. About the same. "Reducing the value of the pension", 18 per cent find that acceptable. Okay, so when the Minister says: "This measure is somewhere in between" we are talking 1 in 3 say that is acceptable. Two in 3, two-thirds of people are saying that is unacceptable making us to wait longer for our pension. When you rank those by choice, 1 to 5, increasing the age at which the full Jersey Social Security Pension is first paid comes second to bottom of ranking. Second to bottom of the ranking. That is the total consultation that has taken place. One has to ask, was that informed consultation and one has to say, yes, people were aware of the demographic bulge at what is happening to the ageing of society. They were not aware, and I do not believe any Member of this House is aware, of what the impact of any of those changes would be on our ability to maintain the pension. We are told that the way forward is to start with increasing the pension age. I think that is the wrong way round. I will tell you for why. The why is the simple fact that what that does is extend the life of the Social Security Fund by one year, from 2034, I think, to 2035. By one year only; so you make everybody work 2 years longer and you get a small measure

of improvement in the condition of the fund. On average, depending upon which year you take - whether it is 2036, 2026 or 2066 - you get between a 7 per cent and a 10 per cent increase in the ability to pay. But that was not the only examination that took place. What Members need in front of them and what the public, I believe, needs in order to fully understand the background and the effect of the options that are available to us of which increasing the pension age is, as the Minister for Social Security says, just one - but it is the one he is going with - then they would need some sort of summary of this paper, which I do not really believe many people in this room have paid a great deal of attention to. It is the Government Actuaries Department Supplementary Report on Possible Changes to the Fund Contributions and Benefits - that is the Social Security Fund - dated 15th September 2009, Social Security Fund. I will just ask if anybody has seen that and examined it. Have they? One, 2 hands, 3 hands. All right. In it, it says that, for example, if you were to follow starting with increasing the pension age, then you would get, let us say by 2066, a 7 per cent improvement in the rate of contribution you need to keep the fund going. If, however, you were to change the indexing on the pension fund then you could, in combination, arrive at a position where the funds are never extinguished. Now I am not suggesting that we should not necessarily go ahead with increasing the pension age.

[11:00]

But we must do that and if we are to do that we must do it with consultation and we must do it with the information that says: "What would be the impact of other moves?" Now, if we were to change in a very straightforward way the funding of the pension and change its linking then we get between a third and 40 per cent change in the level of contribution benefit that we have to put in, the level of contribution. Before people take that decision - and before this Assembly takes that decision - I believe we have to be aware of what that means and we have to look at all of the options, and that means a Green Paper and proper consultation on the full significance of what we

are talking about. People have already said they are prepared to pay some more in contributions, and less acceptable than that is an increase in the pension age. In order to make their mind up - and in this House in order to make its mind up - we have to have full details of what the proportion is, which way should we go in terms of a balance. The Minister talks about his proposals were balanced. They are not balanced. He is proposing we start with compulsorily changing the pension age and moving on some time in the next decade from there. Where is his discrimination law to make the age discrimination illegal, to take the default retirement age out of the system? That has got to take place first surely, and a way forward to balance what is a difficult situation, making sure the Social Security Fund can pay our pensions, needs to be taken forward in an informed way. Not only does it need to be consulted in an informed way, we could alter the contribution rate by this much, by taking so much and balancing it with this, or whatever. But we need that information. This House, I believe, cannot make that decision without having that information. So in the general statement about what we could also do, some of which the Minister has ruled out, we are talking policies to facilitate later working, particularly flexible options including a gradual step down from full-time work to part-time work to full retirement. Age discrimination legislation, incentivising people to delay the time they stop work; financial incentives for employers to hire post pension age workers; tax breaks for wages earned beyond pension age; strong focus on occupational health, people's ability to work at older ages; a strong focus on education and training of older workers at present. Until we see some - and I would suggest at least age discrimination legislation - we should not be proceeding with this, what I believe, one-eyed view of which way we should be going, which has limited return. One year extra on the life of the fund, between 7 per cent and 10 per cent change in the contribution rate. We can do much more and we ought to be able to consider the options of which way we go forward without the Minister saying: "I have decided this is the way forward and we are going for it" despite the lack of enthusiasm for it that is coming from the Jersey public. I will return to finish with a statement in the J.E.P. (Jersey Evening Post) in its opinion column it went on: "It is fair to say that there are sound arithmetical reasons why this change should be made" - the raising of the pension age; as I pointed out those sound arguments are very thin, we get a very little augmentation of the ability of the Fund: "They hinge on the affordability of benefits in the light of demographic changes. Greater longevity clearly means people are drawing pensions for longer. It also means that as the proportion of pensions in the population increases there are fewer people in work and, therefore, less tax revenue to meet increased demand for services." That is fact, we all know about this, the question is how do we address it. This is a limited proposal with limited information. However, if raising the retirement age by 2 years makes some important sums add up and amounts to consummate good sense in actuarial terms, Members

must be aware that this is a measure which also has human dimensions. Balancing the books is one thing and I think that is what we have heard; treating people fairly and appropriately is another. When the human element is introduced into the equation the question of whether the retirement should go up becomes far more complex than the basic arithmetic might suggest. There are, for example, many categories of work and an extra 2 years labour would mean very different things to a manual worker and an office working. Lifting and shifting tend to be major challenges to many of those in their late 60s, but it is also true to say that an extra 2 years of the tensions and stresses that some sedentary workers face can also be deeply detrimental to health. Also to be considered is the impact of a longer working life on the employment market. Could it be the case that those retiring later would block recruitment among school leavers and graduates? This issue is dismissed in the 34 pages as not a problem because we have got fewer young people, so it will not be a problem. We have got fewer young people so why are they such a great proportion of the people who are unemployed? Will that be any different in 20 years' time? The Minister says confidently "yes" he has his crystal ball in front of him, presumably. These are major questions that must be examined in detail before the House charges ahead with legislation with highly significant social implications. This is my opinion. These are major questions that must be examined in detail before the House charges ahead with legislation with highly significant and social implications. Against this background it is legitimate to ask if tomorrow's date is premature, the pension age proposition having been lodged only a few weeks ago. Arguments for and against the proposal will of course be aired on the floor of the House, but can we be sure that Members have had sufficient opportunity to consider the complex issues involved in sufficient depth? I do not think so. Just as I finish, another issue not considered and largely smoothed over, glossed-over, you raise the pension age what happens to people if they cannot work longer? Figures from the U.K. suggest that what happens is that comparing the ages 50 to 54 of the number of people who are sick or in part-time work with those 60 to 64, as they are approaching the pension age, and if you look at those figures you see that the number of people who end up sick or disabled doubles. Doubles. The number of people in part-time work trebles. So that is what happens. What will happen, we save on the pensions, what will happen on invalidity pension, on L.T.I.A. (Long Term Incapacity Allowance) in short term sickness - we will be paying in another way. It is not all win/win because people will end up sick in these extra 2 years. That is the reality. An issue that has not been discussed as well is that in the U.K. they have reduced the number of years you need to contribute - for women in particular - down to 30. Why, because they recognise that women have sketchy work records, they look after children and they do not build-up the full contribution. It turned out that over a third of the workforce have less than 70 per cent of a pension by the end of their working career. Have we dealt with that in this particular issue? No, we have not. What we are saying is these people who have not got the contributions from their working record will have to work an extra 2 years, instead of reducing the numbers of years to contribute to get a full pension we are increasing it from 45 to 47. It seems to me that is an error and not one that we should take without a fully informed debate and the information is not in this debate at all. That is the proposition I am making, that the appropriate thing to do at this stage is to refer back for further information to enable us to decide between all the options, and not just the one presented here, how we wish to proceed.