Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I apologise in advance because I must leave the Chamber as soon as I have spoken to attend a meeting of the finance committee.

The pensions situation is an absolute shambles and the lack of a policy for dealing with it is a disgrace for both the current and previous Governments. Pensioners in general, whether public or private, have been the innocent victims of an economic and financial crisis not of their making. Whether it is the extension of the retirement age, pension levies, the reduction of pension benefits in the public sector or the crisis of defined benefit pension funds, pensioners have got it in the neck. This is a disgrace.

The pensions situation is complicated, but much of the complexity, in terms of different pension arrangements, whether public or private, arises from the fact the system is a shambles. It is an ad hoc process. This legislation is being brought forward under pressure because of the crisis and because of the European directive, but it is yet another ad hoc response that attempts to deal with a more general crisis. If we are to deal with the general crisis, we must start from first principles. We must ask ourselves what we are trying to do and what are to be our priorities. Our priorities should be based on the fact that a decent society provides education, housing, health services and a secure and dignified existence for people who retire. This provision for retired people should not be subject to the vagaries of markets, financial crashes and so on and should be enjoyed by all pensioners, whether in the public or private sector.

Although we must start from the complicated situation we are in currently, the broad answer to the pensions crisis is to deal with the anomaly where €2.9 billion goes in tax relief to private pension schemes, the greatest beneficiaries of which are high income earners with big pensions. Most of the pension relief goes to these people. We cannot deal with this overnight or immediately, but we must do something to resolve this crazy situation. What this €2.9 billion in tax relief to private pensions means is that the State and ordinary citizens are underpinning a private pension casino for these pensioners, with disastrous consequences. We are making a casino of pensions, here and internationally, and whether people will have a dignified existence after making contributions all their lives is subject to the crazy vagaries of the market - of certain people making a lot of money in private pension schemes and of companies running away from their responsibilities.

This must end. It would be far better to transfer the €2.9 billion to a universal pension scheme. One estimate is if we put the €2.9 billion into a universal State pension scheme we could double the State pension for everybody and it would be guaranteed. The advantage of this would be we would have public control of the pension funds and we could use them to invest in what we desperately need to restart the economy. This would not involve gambling them; of course there are never absolute guarantees, but if they were publicly controlled and we invested them in what would be useful in the domestic economy we could be far more certain of the outcome of the investments and therefore have a defined benefit for pensioners which they deserve.

The idea we are moving increasingly from defined benefits to defined contributions, which are like a casino as to what one will get at the end, is wrong and regressive. It is part of a very worrying narrative that old people are now a problem and a burden for society. This is a disgrace and is indicative of a society which is going backwards. For many years after the Second World War we moved in the opposite direction and stated we would guarantee better things for pensioners. When I studied geography at school in the late 1980s I learned that because of the enormous wealth being generated by society the biggest problem we would have 20 or 30 years later would be the fact we would be retiring earlier and what would people do with their leisure time. Instead it has gone in the exact opposite direction; we have longer working lives, more precarious situations for pensioners and fewer benefits. This must be changed.

The legislation is dealing with defined pension schemes and we must deal with this in the immediate term. Unless we deal with the more general problem we will keep running into crises. We must resolve it. In England 90% is guaranteed to a much higher level. We could do this. We could guarantee 90% or 100% up to €60,000 and cut the guarantee for those entitled to more than €60,000 to approximately 50%. Why do we need such a high guarantee for people on massive pensions which in many cases are double the average industrial wage? We should cut it.

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