Dr. Nat O'Connor:

On the social contract and where it came from, in a sense it was after the Second World War when we had the growth of the welfare state and the sense of everyone being in it together. During the war people were literally in the trenches together and it was about rebuilding a society. There was something about the pandemic that drove a similar level of threat, whereby people felt we needed to stick together. There is also an opportunity with climate change to see that we need to work together more cohesively as a society rather than as individuals to meet the threat.

In this context the State pension is a clear example of the social contract whereby people feel we are all in this together. We all pay in and we all get a decent pension but it is not yet underpinned by law. A crucial recommendation of the Commission on Pensions and the Commission on Taxation and Welfare is that we should have a benchmarking process for social welfare payments that should include the State pension. They also recommend that we should have indexation so that when we have high inflation, as we do now, or average earnings rise dramatically, core welfare will keep track.

Putting in legal underpinnings so that people have assurances would help in very practical terms to cement part of the social contract. People would know what they will get if they pay in. The contrast is that at present there is a lot of cynical dialogue that people will never have a State pension because it will be gone by the time they get to retirement age. There is a defeatism about the ability of the State to maintain the State pension, which is now and will be for the foreseeable future the bedrock of income in older age. There is a need to re-energise this. Simply putting in place the right legislation will help to cement it as part of the social contract.