Growth won’t save us – there won’t be any

I can’t be sure of much about next year. But here’s one fact you can’t argue with: 2013 will be the year that we get old.

How’s that? 2013, as Paul Hodges of International eChem (IeC) points out to me, will be the year in which the average UK ‘baby boomer’ (born in 1958) turns 55. At any other previous time in history, the average person would have been dead by now (even in 1900 UK life expectancy was only 50).

This lot however, in the main, are looking at another 25 years before they even start to worry about choosing a nursing home, let alone thinking about death: the latest census showed us that the over 85s are the fastest growing group in our population, and that the modal age of death (that at which death is most common) is 85 for men and 89 for women. We now have the oldest population in history, with our baby boomers making up a massively influential group of what Hodges calls the ‘new old‘ (those 55 and over). 

You might think this is of little relevance to the things you are currently worrying about for 2013 –the collapse of the euro; the slightly nuts behaviour of our inflation seeking central bankers; the chance that a newly nationalistic Japan might amuse itself teasing China; the end of trail commission payments to IFAs; the UK’s credit rating; fracking and earthquakes; the fact that Saudi Arabia’s King Abdullah is uncomfortably past the modal age of death; and so on. But it is in many ways almost the only relevant bit of information you need to know to see what is going on in the West today.

I’ve written about this before here so regular readers will know the key points. Between 1946 and 1970 the UK saw a huge boom in births, with around 900,000 new babies born every year. That was a 15% rise on the previous 25 year period and something that added three million people to the population.

Since 1971, births have slowed to more like 746,000 a year. You might think that is no bad thing, given how overcrowded parts of the UK already feel, and it could easily be. However, it is also very probably the cause of our very low growth. 

The ‘new old’ already make up 28% of the UK population (18 million people). They are likely to be 23 million strong by 2030. That matters because the new old aren’t great spenders. They turned 25 back in 1983. Then they were spenders. They settled down, bought houses, raised children and (crucially) as years went by, borrowed money to consume.

But now their consumption patterns, as Hodges says, are changing “quite dramatically”. New data shows, for example, that the average 65-year-old spends only 68% of the average 30-49 year-old. Add that nugget of information to the bit you already know – that consumption makes up 60% of UK GDP – and you will immediately see the problem: as our population ages our average propensity to consume falls and so immediately does our economic growth rate.

Now add in a little post financial crisis deleveraging and all will be clear. It is perfectly obvious that, barring some thrilling and utterly unexpected change in our national circumstances, we should continue to be in a low growth environment for the foreseeable future.

It is also pretty obvious that there isn’t much we can do about it. Politicians insist that they can somehow create growth with their increasingly ‘unconventional’ policies, but demographics suggests that they are completely wrong: no amount of money printing can make 65-year-olds into 40-year-olds (would that it could) or even make them as productive as 40-year-olds. Nor can it force today’s financially terrified boomers into bumping their spending back to the peaks of their youth.

I’m not entirely sure how we deal with all this, but a good starting point might be for politicians to recognise it and talk about it. Continuing to pretend that our economy will be saved from its debts by economic growth when there isn’t going to be any economic growth just isn’t very helpful. 

PS Exactly the same goes for the US. More from Hodges on America here. Also worth reading on how growth as we know it is gone forever are Jeremy Grantham (just read page four) and Chris Brightman.

  • NeutronWarp9

    I think this time of year especially it is time to stop and smell the flowers – albeit at a terrible, guilt-ridden cost to our carbon-footprint. Growth per se, in economic terms at least, is a somewhat vacuous concept if you don’t appreciate its context, cost and value.
    Chill out a little MS and enjoy life. If we are all getting older thank goodness for that because the only alternative is death and I for one ain’t ready for it!

  • DrGrumpy

    This sort of article is very interesting and useful because it ignores the day to day ‘noise’ and focuses on the fundamentals. Keep them coming. I mostly agree with what you say, but but the decrease in spending historically associated with old age probably won’t be as pronounced because the baby boomers are more active than previous oldies, eg more foreign hols, sporting activities, computers, etc.

  • Digby Green

    A great article.

    Yes, I have always wondered how we can keep producing gdp growth, there has to be a limit to what a country can produce, and as you say older people consume less (aside from health care)

    And with the continual fall in prices of manufactured goods how can buying those items add to growth?

    As you say may be its time for politcians to come clean on growth and concentrate on jobs and exports.

  • Timetrader

    I have a better idea.

    Instead of perpetuating the pollution of the earth’s air, water, land, and every living creature in pursuit of profit and its advantages; let’s instead evolve beyond money, politics, and war.

    Well, it’s really not my idea. I just advocate it. Time runs short. We’re approaching the point of no return.

  • Tony Weddle

    “even in 1900 UK life expectancy was only 50”

    Do you have a reference for that? What does it mean, anyway? If you mean “life expectancy at birth” then it is totally misleading (and, unfortunately, dredged up this way quite often). If one made it past infancy, I very much doubt one would have expected to be dead by 50; there were plenty of old people in the UK in 1900.

    Oh, and there is no such person as an “average person”.

    On the main topic, the end of growth is an accurate assessment but primarily because of resource depletion, debt burden and environmental degradation, not because an increasing proportion of the population is elderly.

  • Dave

    Good article.
    If you have 15-20 years education at the front end and 20-30 doing nothing at the back end you have a lot of saving to do.
    The baby-boomer did not do that, they rolled-up the debt for others to pay. Unfortunately the government makes it worse. QE steals from pension funds and who pays for that?
    You guessed it the same bunch who spent all the money have ring-fenced final salary schemes, while the future pensioner gets robbed.
    No one mentions all this as the basic problem is not understood and you articulate it well. Pay your way oldies..

  • Boris MacDonut

    There is a hint here that Merryn may finally be reading some Danny Dorling and trying to get a handle on demographics. If so it is a good try but some of the stats quoted are awry. It is widely accepted that the baby boom lasted from 1945 to 1965 so surely the average boomer was born in 1955. Our birth rate is far from declining ,having increased sufficiently in the last 5 years to require 90 new schools in London alone.
    It is cheeky to start classifying 55 as old just when pension age is being put back to 70 and many are working longer as well as living longer. Everything is being delayed as we live longer, FTB’s are now about 35, folk marry and have kids at 30, many are in education until 22. It makes sense to redefine old as older, not younger. Many are paying mortgages well into their 70’s.

  • Boris MacDonut

    55 was the chosen age for defining old back in the days of three score and ten. Now we live to 85 this should be pro rata’d to 67. Incidentally just the age the state pension will be given to those born after 1960.
    The number of births in the UK is up by well over 20% since 2001 and last year hit 815,000. As these nippers can expect to live to 90 or 100 it doesn’t really matter that once over 65 they will reduce spending as they will spend for more years.

  • Boris MacDonut

    …..and by the same token in 1900 old would have been 40! How on earth did the UK achieve growth with most people knackered by the time their kids were teenagers?

  • Chucklebus

    Have we reached a global saturation point? ie..
    There’s little more ‘stuff’ we can buy…ie no major innovations.
    Stuff’s not going to get any cheaper to make…as all the low cost economies have already been exploited by manufaturers.
    Stuff’s not going to get any cheaper to buy…as dominant online retailers have flattened the market.
    I can’t buy any more stuff… because my wages aren’t going to increase….because our employers can’t grow profits… because of all of the above.
    The government thinks the answer is for banks to lend more, so I will borrow more money to buy more stuff….isn’t that what got us into this mess?

  • Grahame

    I agree with this completely. And you can forget about today’s young spending more to compensate – it’s the total amount of money that the young have to spend that counts – and that will be less, because there will be fewer of them. Add in current debt levels and its clear that even if things were to return to the way they were, it wouldn’t last long.

  • Matteo

    vity as a nation. Of course the more we have to pay interest (on debts) the less we can concentrate on being productive…We all know that as a country we do not sell much to the rest of the world, apart from the weapons’ industry and other few exceptions. Unfortunately I convene with Merryn that this is potential a perfect storm. I hope to be wrong of course but it is not exactly use to move a supertanker like this one…. One first thing to do would be definitely to engage those who are older (55+) back and actively into the productive world, not easy for Western society… However their experience is bound to be a real asset for many businesses in Britain.

  • John Clark

    @ Tony Weddle
    In 1900 many children died in infancy, especially among the poor. That changes the average age of death considerably. See–series-pp2/mortality.html

  • Romford Dave

    John, you seem to have referenced a chart that reinforces the point Tony Weddle was making, yet presented it as evidence to the contrary.

    Or have I overdone it on the Christmas sherry?

  • Cliff Hanger

    The demographic time-bomb is indeed an important factor to the ‘end of growth’ story but the most devastating impact is the end of cheap, plentiful conventional crude oil.

    A cursory glance at the growth of western economies over the last 150 years has been mirrored by the discovery of conventional oil fields. Even the IEA in their 2010 outlook confirmed that conventional fields have plateaued since 2005

    And before anyone says it, no shale oil/gas is not going to save us. The ERoEI is appalling and will be nothing more than a stop gap.

  • Joshua Lee

    I enjoyed reading this article, thank you. Fundamentals are the most important facts for a true value long term invester. Martin Hutchinson wrote a very good piece too about Japan and USA earlier this week. The USA will reach the point of no return in 3 years time, as Japan did in 1995. Europe wide problem so we have to look at reaping the rewards from the emerging markets, with some exposure to income, and gold miners, Japan and Russia. Good luck!

  • Boris MacDonut

    Growth is needed if the population is growing. But it can still be of little relevance even when the population is not growing. The fact that older folk need/spend less is a major factor. Population may grow simply because the old live longer,but there is still plenty of spending in the economy as the extra people need less. Merryn’s failure here is to assume that growth is important at all.

  • Boris MacDonut

    #17 The maths is thus. In an economy with say £200,000 and 10 adults, 3 of whom are over 65 and spend at about two thirds of the others then 3 have about £15,000pa and the other 7 have £22,140. In year two the economy stands still but one more adult turns 65. So now 4 spend £15,000 but the other 6 have £23,335 a near 5.5% rise. It is not so much how the spend is shared out as whether it is spent at all that counts.

  • Critic Al Rick

    What fuels the growth of a business? Profits.

    What constitutes profits for UKplc? Balance of Payments Surplus.

    How profitable is UKplc? Uh! Oh!

    The only profiteering (growth) in the West for the foreseeable future at least will continue to be confined to the 1%. And that won’t come from Balance of Payments Surpluses but from increasing accrued Balance of Payments Deficits, as in the relatively recent past, but more significantly be at the expense of loss of so-called disposable income and formerly accrued wealth of the 99%.

    Growth, such as it is, is being manifested as the growing wealth of the 1% and growing loss of freedom of the 99%.

    This situation, I fear, is going to end badly.

  • Romford Dave

    Those nasty one percenters, at fault yet again, despite the biggest driver of growth being state waste on the remaining 99 percent.

    Try telling the bottom ten percent of the one percenter, that they’re the evil barstewards that represent everything is wrong in society, as they struggle to get their heads around the 50p tax rate they’ve just about stumbled into.

    If we’re going to moan about the super rich cat strokers manipulating the system in their quest for a NWO, can we get a more accurate figure to identify them with and give the much abused inbetweeners a break from the vitriol?

    How about the .o1 percenters?

    Or the practically nil pointers, for our European chat caressant megalomaniacs?

    On a different note, should we not embrace the lack of growth along with its close cousin, illusion of growth, given their association with the evils of modern life and destruction of the panet?

  • Critic Al Rick

    I wouldn’t know what the exact %age is but I would define it by the threshhold between ‘winners’ and ‘losers’; I would also expect it to decrease with time.

    In any case if you are presently amongst the absolute 1% then you are, whether currently ‘winner’ or ‘loser’, probably there, directly or indirectly, via a system rigged in favour of the insiders.

    On a different note I would expect Planet Earth to be quite capable of looking after itself…

  • Romford Dave

    I probably do scrape in, just.

    But earned in the private sector you often extoll CAR, if that somehow helps justify its source, although in all honesty given the largesse of both the financial sector and then subsequently the taxpayer over the past couple of decades, it would be hard for any private sector business to deny a benefit from it, whether he be tinker, tailor or spy.

    But money should never be the arbiter in matters of winning or losing for therein lays the road to unhappiness. The multi-millionaire is equally at a loss when he berths his yacht next to a billionaires plaything regardless of his own wealth.

    I’d definitely agree on Planet Earth’s capabilities though, although some of her solutions can be drastic at times.

  • Critic Al Rick

    I often extol CAR, do I indeed? Well Dave, I’m afraid in order to defend myself against that accusation I need to know to which version of that acronym you refer, perhaps you would enlighten me.

    Arbiter: in the context I was using ‘winners’ and ‘losers’ was referring to wealth, assumed by myself as being what the Occupy Movement uses as its threshhold for its so-called 1%, 99% divide. It’s easy for someone with more than a modicum of wealth to say that happiness and money should be unrelated; particularly when, it seems, those with the most wealth seem the most discontented not to have more; don’t you agree?

    And it’s effectively those evil barstewards, albeit unwittingly in their drunken (with power) stupor, coaxing Planet Earth to take drastic actions… Brings to mind Le Chateliers’ Principle…

  • Romford Dave

    You’d be defending yourself from yourself Rick, as it was your initials I was using rather than any acronym.

    Happiness is a state of mind not a thickness of wallet, or at least it is for me, I’ve lived without either at various stages of life and I’m hardly unique in that.

    Occupy Wall Street may have had some genuine grievances given the structure of American society and its distribution of wealth, but it doesn’t necessarily travel across the pond well.

    It’s rapidly becoming a movement occupied by caricatures as far removed from the interests of the 98% as the 1% at the other end of the spectrum. Seems to be the norm once the hustlers and the shufflers take pride of place as the ’insiders’ often referenced in Bill Bonners emails.

  • Romford Dave

    You’re mistaken CAR in thinking its only a single digit population percentage prompting Nature’s response. Damage to the planet is due to the stupidity of the majority. How the stupidity gene is distributed is arbitrary, education helps, but even then some baulk at the cost as the outcry over green taxes testify.

    Le Chateliers principle is highly appropriate, given how it turned out for the Egyptians and a little ironic too that the Occupy Movement was inspired by in no small part by the Arab Spring.

  • Boris MacDonut

    #25 Dave. I think Rick needs a New Year’s resolution to be less negative and less paranoid. I have immense respect for Rick. He is a regular conributor and an excellent catalyst for debate. I often agree with him, but he does tend towards the gloomy prognosis. Rick has a healthy distrust of the CoLC and the powerful but i’m not so sure he has the interests of ordinary Joes at heart, only his personal agenda.

  • Critic Al Rick

    Ahaaa!!! CAR it is then, RoD.

    Are you sure happiness is not a thickness of mind rather than not a (w/h)ealthy state of wallet? After all, they say ignorance is bliss and refer to seeing things through rose-tinted spectacles; would you, after removal of any such spectacles, consider yourself to be as content as you now perceive yourself to be if you were to be placed amongst the 20% at the other end of the wealth spectrum?

    Mistaken: oh no I’m (pantominingly) not! I realise we’re all of us to blame (at differing extents) for inciting Le Chatelier’s Principle as it variously applies to the Humans/Planet Earth equilibrium – primarily TPTB for leading us astray and setting bad examples, then, in varying degrees, the sheeple (the majority) seemingly in need of having to worship (imitation being perceived or engendered as the greatest form of flattery). The remainder having to be largely swept along by the tide of events whether they like it or not.

  • Critic Al Rick

    Now then BoMac, before I respond to your points @ 26. I would like to know what you think my, quote you, “personal agenda” is.

    Also, you haven’t yet let me know as to what words your CoLC acronym represents.

    To be more on topic, without your adequate response – there won’t be any growth – (of my response).

  • Critic Al Rick

    @ 22. RoD

    So which part of the Private Sector were you ultimately in – the Truly Private Sector (TPS) (the one I often extol) or the Quasi Private Sector (aka Quasi Public Sector or Cartel, etc Sector [with an emphasis on the etc bit], the CeSpit)?

    I was in the TPS near the bottom end of the playing-field. I never saw any benefit from any largesse throughout my self-employment from 1970 – all I ever saw was an increasing level of outside interference and a playing-field with an ever upwardly increasing slope.

    I did at least reap the satisfaction of being a big cog (albeit in a small wheel travelling uphill with all kinds of obstacles put in its path). I also reaped the satisfaction of knowing I never cheated anyone; how many in the CeSpit can boast of that level of satisfaction? How many in the CeSpit would see such boasting as virtuous?

    What goes around comes around, eventually. There will be no Growth; at least not before a massive Retraction.

  • Boris MacDonut

    #28 Rick . I think you have a doom agenda that is reinforced most likely by the ultimate failure of a provincial ironmongery due to out of town superstores like B & Q.

  • Romford Dave

    Electrical contracting is where we make our money Rick, far removed from the hallowed financial halls that cause the angst amongst most. Whether its truly private or quasi private is more difficult to answer as we’d need to know their source of funds, although we do know none of our clients are, or ever have been public bodies.

    What happens if an independent airline contracts us to carry out some work and pays us with the proceeds of flying banking executives, or maybe from the profits of flying a 737 full of NHS doctors on a boozy stag weekend to Barcelona?

    I think of us as a truly private company, yet recognise the value the circular nature of money has had in circulating my way.

  • Critic Al Rick

    Sorry to disappoint, Boris. I wasn’t a failure; my country failed me.

    agenda – a schedule or list of items to be attended to

    It is TPTB with an agenda, not I.

    Perhaps you mean:

    complex –
    (i) a group of emotional impulses that have been banished from the conscious mind but continue to influence a person’s behaviour
    (ii) an obsession

    Again, sorry to disappoint.

    It is TPTB with the complexes, not I.

    Go to SpecSavers next time Boris; you’re shooting at the messenger.

    Nevertheless, I thank you for your complimentary comments @26. You’re not all bad, yourself.

  • Critic Al Rick

    @31. Romford Dave

    Some of your clients, although not Public Sector, may be Quasi Private Sector, i.e. beneficiaries of a rigged playing field.

    However, I would distinguish whether or not your business is TPS by the nature of how your contracts are made.

  • Andrew H

    I’m afraid Boris’ is cherry picking numbers, nor using them honestly.

    Firstly the pension age will not be raised to 67 until 2034, and then raised again to 68 until 2044 (See Pensions Act 2007).

    There is a clear demographic trend, within the UK of a rise of those aged 65 and over, and a fall of those of working age.

    Those of pensionable age made up only 12% of the population in 1967 and now 17% of the population today.

    The working age population appears to have peaked at approx. 66% in 2007 and appears to be declining.

    The population below the age of 16 appears to be in decline. The % of people under 16 in 1967 was around 24% and is only 17% in 2010.

    The live births per 1000 has fallen from around 18 in 1967 to just under 13 i 2010.

    The death rate per 1000 has falled from around 12 in 1967 to only 9 in 2010.

  • Andrew H

    State pensions were introduced by the Pensions act of 1908, when life expectancy was around 50 years of age, and had a qualifying age of 70.

    Estimating from a population pyramid from 1911, of a population of 35 million, not more than 100,000-200,000 people would have claimed a pension.

    Where as today, of a population of 63 million, approx. 11 million will be claiming a pension.

    Further, what Boris neglects to mention, is that whilst life expectancy has risen, the age at which people continue to work has not, worse still, medical treatment has allowed people to live longer but in a significantly disabled conition often requiring intensive support.

    Those are the numbers and I make no comment with regard to what the policy response should be.

  • Andrew H

    I will say is, that this seems like a terrible burden for our children, and unless there is a way for medicine to advance such that terrible illnesses such Dementia, Heart Disease, Arterial Sclerosis, Arthiritis, Diabetes (but to name a few) which can leave people unable to work and requiring additional medical and social support for many years, can be completely cured.

  • Andrew H

    Here’s another quote from Boris, that is no fully honest:

    “Everything is being delayed as we live longer, FTB’s are now about 35, folk marry and have kids at 30, many are in education until 22. It makes sense to redefine old as older, not younger. Many are paying mortgages well into their 70’s.”

    What he neglects to mention is that as far as I can tell the age of menopause has not really chaged, so delaying the age which people have children gives people less chances to conceive, further, the incidence of birth defects increases sigificantly once a women tries to conceive when over the age of 35.

  • Andrew H

    Boris’ quote regarding mortgages also links neatly into the fact that goverment policy in this regard is also hurting demographics once again, such that the correction in house prices that began in 2008 was deliberately halted by goverment intervention with bank bailouts, quantitive easing, and SMI payments (50% of which I believe is claimed by retirees, and has no limit upon how long the government will continue paying).

    It is very difficult for young people to be able to save for a home and a reasonable pension at the same time, or for it to be possible to obtain a suitable home in which to raise a family in the first place (from the perspective of my circumstances it is a mutually exclusive choice between either a modest home, or a pension).

    Worse still, there will also be no recovery in the UK economy until house prices finally correct, and further, the UK state pension is effectively a ponzi scheme in which payments into the scheme fund current out goings.

  • Boris MacDonut

    #34 to 38 Andrew H. How bizarre. You accuse me of not being honest and back it up with incorrect “facts” that seem to have spewed from the top of your head. My whole point in quoting accurate stats is to counter the outpourings of those like yourself with a specific and cynical agenda……oh and at #37 it should say fewer chances not less. I correct your failings in my next post.

  • Boris MacDonut

    #34-38 Andrew’s blunders. State pension age in the UK will rise to 66 in 2020, 67 in 2026 and 68 by 2044 as announced in the 2011 autumn statement,with the aim of a rise to 70 by 2070.
    Population under 16 is far from declining having risen from 670,000 in 2001 to 815,000 in 2011,a rise of 22%, as I said putting pressure on school building programmes.
    In 1911 the UK population was just under 46 million,not 35 million. The number of over 70’s was hugely greater than 200,000. 1911 census shows 16.5% of the population over 65 (7.5million) so Andrew suggests that 7.3 million of them died before age 70!
    My favourite is the guess about menopause. This is 44 in India, 47 in Egypt and 52 in the UK and most of the western world. Like most aspects of our civilising lives it is getting later.

  • Boris MacDonut

    #40 Oops. My own blunder there. The birth rate rose by 22% that is 815,000 live births per year, giving a total pop under 16 of around 11.5million.
    #38 When was it ever easy for young people to save for a deposit? Choose a date from the following ;1932, 1952, 1972, 1992, 2012.

  • Critic Al Rick

    Boris, don’t you expect any of the ‘goal-posts’ to move in the meatime?

    For instance:
    i) It wouldn’t surprise me, in consideration of the dire state of the Real Economy, if the majority of those leaving school now (if not left within the last 10, even 20 years) will not receive any Pension, let alone a State Pension; just Unemployment and Disability Benefit – if they’re lucky.

    (ii) Are you aware there’s talk, at least, of discontinuing cancer treatments for the over 70s? I’m thinking Life Expectancy in the West has almost, if not already, peaked.

    I know you’ll probably say I’m being pessimistic. But only a self-delusionist would not be anticipating the demise of, at least, the West.

    You think I have an agenda; well, if I must:

    1) I hope to be out of it before it all comes crashing down.

    THE END (of Freedom)

  • Boris MacDonut

    #42 Rick. Pessimistic yes, but I have to say it is unlikely that we will wait until 2070 for the state pension age of 70. It is believed that the first person to live to 150 is already alive and the number on centenarians has increased 10 fold in 50 years so some serious rethinking of what constitutes old will be required.

  • Andrew H


    The population figure is accurate for the population of England and Wales, £35 million, it makes no difference to the argument.

    I could only estimate the number of 70+ years olds from the population pyramid, it makes no difference to the argument.

    I’ve found the exact numbers of claimants of the first old age pension introduced in the UK and Ireland 1908 and was claimed by approximately 500,000 people, therefore (taking your numbers):

    1908 Pensions = 500,000 / 46,000,000 = 1 percent of population claiming pension

    2010 Pensions = 11,000,000 / 63,000,000 = 17 Percent of the population claiming pension

    The pension burden is 17 times what it was in 1908, and the numbers of claimants are rising.

  • Andrew H

    Further, the pensions act of 2011 ( states the following:

    67 between 2034 and 2036
    68 between 2044 and 2046

    This is the current law.

    The numbers you have quoted are only for consideration, hence “autumn statement” and not “parliamentary act”.

  • Andrew H

    All of the long term population figures I can find point to a decline in the working age population in percentage terms, and an increase in the number of pensioners as a percentage (the figures I stated were figures from the World Bank).

    I can find no studies that indicate the age of menopause is on the increase in the UK.

    If you can find some figures that indicate that since 1911 the age of menopause has increased by 26 years, in line with the life expectancy of women (increase from 54 to 79.9 years), I would very much like to see them.

    You still refuse to debate the point that the risk of birth defects significantly increases when women conceive over the age of 35 years.

    And you also refuse to acknowledge that whilst medicine is able to prolong our lives, it prolongs many lives in a state of profound disability requiring long term support and care.

  • Andrew H

    What would we expect see if our population were aging, and medicine were prolonging lives in disability, one manifestation would be an increase in adult social costs.

    According to the King’s Fund adult social care costs have increased 5% year on year from 1994 and 2009, and is way above increases of UK GDP which have been around 2-3% per year in the same period.

  • Andrew H


    With regard to young people buying a home, house prices adjustd for inflation have doubled between 1994 and 2012, the average age of a first time buyer has risen from 28 to 35 in just ten years.

    ONS figures show that between 1986 and 2011 the median wage adjusted for inflation only increased by 62% (the bottom 10% of earners have only had a wage increase of 47% in the same period).

    The TUC (someone on your of the debate I would note) assert that wage growth has not kept up withg rowth in productivity, and that personal debt doubled between 1997 and 2007.

    To summarise:

    – Houses 100% inrease (adjusted for inflation) between 1994 and 2012.
    – Median wages 62% increase (adjust for inflation) between 1986 and 2011.
    – Personal debt 100% increase between 1997 and 2007.
    – Average age of first time buyer increased by 7 years.

  • Andrew H

    Further the house price to earnings ratio is now 4.6 times after hitting a peak of nearly 6 times in 2006/2007.

    The long term average is only 3.5 times wages (from Nationwide figures starting from 1953), with short lived spikes in the mid 1970s and the late 1980s of approximately 4.5 times.

    The house price bubble that culminated in 2007 is unprecedented, and government intervention since then has indefinitely suspended house price to earning ratios well above the long term average.

    Much of this is greatly exacerbating existing demographic problems, not to mention, Quantitive Easing depressing annuity rates and therefore pension returns.

    For some indication of where this is leading we only have to look at the Japanese experience of the last 20 years.

    I’m afraid Boris your optimism seems to come straight from the “Ministry of Rose Tinted Spectacles and Sticking Your Fingers In Your Ears and Singing La La It’s Not Happening”

  • Andrew H

    In fact Boris, you sound as condescending and misinformed as Bertie Ahern, when in 2007 he famously said the following:

    “He didn’t understand why people sitting on the sidelines, moaning and cribbing about the economy did not commit suicide. “

    Nobody is deliberately trying to be pessimistic, gloomy, or
    negative, economic reality unfortunately cannot be ignored and as things stand, the personal circumstances of so many around me mean they have little means to rent or buy no more than a rabbit hutch and no way to save for a pension, on top of stagnant wages and inflation. Govenment policy also massively hampers any efforts at self improvement and self reliance.

    Putting on a sunny countenance and trying to convince ourselves otherwise and that the government are there to lend a helping hand, is to sleep walk into penury.

  • Andrew H

    , and ever increasing levels of aggregate debt (private and public) which by some measures along with Japan is the highest in the world.

    None of this can continue indefinitely, and any responsible adult should arrange their affairs in accordance.

  • Andrew H

    By the way Boris, why are you quoting absolute populaton numbers?

    Trying to deliberately confuse people again?

    Your quote:

    “Population under 16 is far from declining having risen from 670,000 in 2001 to 815,000 in 2011,a rise of 22%, as I said putting pressure on school building programmes.”

    I’ve quoted percentages because you need to see the burden of pensions on the working population as a percentage.

    The percentage of working and young population is shrinking in terms of the retiring population.

    Your absolute numbers have no context and are therefore meaningless.

  • Critic Al Rick

    @50. & 51.

    Well said Andrew. From where I’m sitting, despite the fantastic panoramic view, the future looks very bleak.

  • Critic Al Rick

    @50. & 51.

    Well said Andrew. From where I’m sitting, despite the fantastic panoramic view, the future looks very bleak.

  • Boris MacDonut

    #44 to 52. Andrew’s next 9 pearls of wisdom. Are you okay? Too much shery at Xmas can lead to a lot of unwanted verbiage. How do you expect to be taken seriously when you say leaving 27% of the population out “makes no difference…”?
    You seem more obsessed with the menopause than an episode of Loose Women. How is the age of menopause relevant? Most western women limit themselves to two children or at most three. Fitting them in betwen ages 30 and 52 is pretty easy. It was harder having the average of 6 kids most women had 100 years ago, especially when you were exopected to die before even reaching menopause. The pension burden is not 17 times what it was in 1911. For a start we are 8 times richer and we raise far more in taxes…quite lot of it specifically to give our elderly a better life. By all means rant on though you are doing your cause untold damage.

  • Boris MacDonut

    I wonder if Mr Guesstimate,Andrew H, has seen today’s news. It tells us the Government will “announce” next week that pension age will rise to 67 by 2026….just like I said. To 68 by 2034 and to 70 by 2043 and even 77 by 2070. Well I never.

  • Andrew H

    Boris, Thank you for acknowledging my sagacity.

    I mention the menopause because you made the argument that people leaving things later in life is not a cause for concern, when really that is just not true due to various biological limits that you conveniently gloss over.

    The menopuase can start as early as a women’s mid thirties, the average of a first time home buyer (a key requirement for some to feel there is enough stability to begin a family).

    The chance of birth defects also increases significantly when a women conceives over the age of 35.

    None of this is conducive for a healthy, young, productive, population, and World Banks statistics support this view, which show that the percentage of pensioners as a share of the population in the UK now stands at 17% as opposed to 12% in 1967.

    Your point about lower life expectancy in 1911 doesn’t hold because it is above the age of menopause.

  • Andrew H

    You are right about the pension burden, the calculation has more input than just population number, let’s look at the numbers more closely:

    The basic state pension in 1908 (for a single person) was 5 shillings a week, 260 shillings a year, or £13 pounds a year.

    If we take the inflation multiplier for 1908, a figure of 99, then the yearly pension in 1908, for a single person, in 2012 prices is £24.75 a week, or £1287 per year.

    The basic state pension today, given a full national insurance contribution is £107.45 a week, or £5587.4 per year.

    Therefore the pension burden purely in monetary terms on a per person basis is 4.34 times worse.

    So taking into consideration the increased burden in terms of popuation, the state pension is 4.34 * 17, or 73.78 times more onerous.

  • Andrew H

    orking population and young people to support 9 times what was originally proposed, and you think this is conducive to growth and productivity?

    With regard to the latest government announcement on pensions, assuming it does become law, 2026 is just too late to start making adjustments (the pensioner demographic is too large and influential for the government to really be able to take away entitlement from this group).

  • Andrew H

    The government is in severe financial straits now, the government have been putting on the credit card about £1 billion every three days since 2009 and using printed money to finance it, such that entire stucture of state spending is now a gigantic ponzi scheme which promsises more in benefit than can possibly be contributed through tax revenues.

    Worse still, a generation of people are being indentured to pay for an unbearable burden, unable to purchase a home, unable to save for their retirement, denied help from the state, but still as vulnerable to the same disabling illnesses that their parents were.

  • Andrew H

    p.s. The housing bubble is another way in which older people have been able to benefit to the detriment of the young.

    In summary, high housing costs, pensions, medical costs of age related illnesses (which will worsen as the population ages) combine to make an onerous burden for the young and working population, which has just not existed in the past, and will be a serious brake on growth, which of course the government need to keep their spending promsises.

  • Boris MacDonut

    #57 to 60 Andrew’s next 4 missives. This is now getting funny. You betray a blatant misunderstanding of sociology, demographics and economics.
    #57 Throughout history women have made choices about when to have their 2 or 3 kids. Anytime between 14 and 45. The age of menopause is a bit of a red herring as most manage it well before age 52.
    #58 In 1908 the average wage was£1.80 a week.Your inflation multiplier is irrelevant as we are now 8 times richer. To put a 1908 salary into today’s money requires a multiplication by 380. In today’s money the 1908 pension would be £95.
    #60 The Government is patently not in severe financial straits as the free market you Tories so love gives us a borrowing rate at just 1.4% for our bonds. Places that are in trouble are paying 10%.If you think the UK is in trouble you must read the Daily Mail…….and actually believe what it writes. we are the sixth richest country on earth, stop trying to undermine it, it is disloyal as well as misinformed.

  • Boris MacDonut

    #61 Andrew. Now your ill informed vitriol extends to suggesting we should go back to the “good old days”when folk died younger. Your argument is just spleen that resents our elderly for living longer. You are unable to see that the world changes and unwilling to have it affect your wallet. Of course our country can afford to have people live longer,but we need to redefine old.

  • Andrew H


    My calculation was quite clear, and also took into consideration your figure of growth in prosperity, I’m sorry you are not able to understand the mathematics.

    To make my point clearer, if you are not able to understand the numbers, I’ll summarise:

    In 2012, there is 1 pension claimant for every 6 of the population, assuming everyone else pays tax, will each have to pay £17.91 per pensioner, per week.

    In 1908, there was 1 pensioner for every 100 of the population, and using your figure of £95, again assuming everyone pays tax, who each had to pay £0.95 per pensioner, per week.

    Using this calculation the burden is nearly 19 times greater than it was.

  • Boris MacDonut

    #64 I understand the maths.I don’t comprehand your motivation in deliberately seeking to mislead people. You are not comparing like with like. The “burden” both military and economic of running our empire in 1912 was massive.We no longer do this and couple with being 8 times richer we can therefore afford to offer our elderly a decent retirement. You seem to want to deny them this to boost your own selfish wallet.
    You are cherry picking numbers that suit you and seeking to distort the truth…..but then all Tories do that all the time, it is the main reason nobody trusts you and the main the fundamental reason you’ll never be re-elected.

  • Andrew H


    My original calculation was actually generous to you, in that the final increase was only 9 times, not 18 times.

    Ok, so we are the 6th richest nation on the planet? What’s your point?

    Further our borrowing costs are low because the government through the Bank of England have purchased 30% of the entire gilt market with printed money.

    Where do you think the UK’s borrowing costs would be without the BOE rigging the market?

    Do you think money printing, given historical precedent, is indicative of a health politicial economy? Or a government that prudently manages their finances? Do you think money printing can continue indefinitely?

    I’m pointing out that the government clearly has a spending problem, I’ve not said what should be done about it.

    Of course the first step to solving a problem is to admit that there is a problem in the first place.

  • Andrew H


    Your point about empire is not valid either, it doesn’t match with the numbers.

    Government spending as a proportion of GDP was far smaller than it is today (about 10%).

    Look at defence spending specifically, back in 1910 about 2% of our GDP was spent on the military, almost the same as today:

    2010 = £43 Billion (Defence Spending) / £1458 Billion (GDP) = 2.9%
    1910 = £64.9 Million (Defence Spending / 2,140 Million (GDP) = 3.0%

  • Andrew H


    I’m not a conservative, nor have any affiliation with any political party. The politicial system is broken and those in charge are incapable of telling the truth, lest it be unpopular and cost votes at election time and rely on one dimensional slogans and sound bites.

    I do not vote, all manifestos are based on promises that cannot be kept, and are based on the premise of stealing from one group of people to give to another group.

    I have not interest in participating in the dog and pony show that involves electing yet another set of dictators for five more years.

    I’ve got to look out for the future of my family, that’s my agenda, if I mislead myself, I hurt my family and myself.

  • Boris MacDonut

    #68 Yes,a bit rude of me to accuse you of Toryness. Apologies for that. Nobody deserves to be ridiculed with that label.
    What do you see as a sensible level of state provision for the elderly.Would you restrict it to over 75’s or over 80’s? Or perhaps just those who are starving. I think it would be a major backwards step for civilisation to stop providing, but we do have to start upping the age at which we declare folk to be old.&0 is probably a reasonable starting point.

  • Steve T

    @69 & 70 Boris – firstly please check the content properly before you post your comments – they are not entertaining enough to warrant reading them twice over.

    As regards your comments, you really do say some stupid things. WRT your starving people comment, this is silly even by your standards. Edwina Currie famously said in 2011 that nobody in this country is starving – and when she challenged the media to produce one single starving person, was introduced on TV a ‘struggling’ single parent mother feeding a big hungry expensive dog out of her benefit money! Shock horror – the mother was told to ditch the dog and spend that money on her family.

    I recognise that there is genuine hardship in this country and the government is struggling to cope – however I differentiate between those who deserve my money (and your money) to help them out of a temporary difficulty, and the feckless and lazy who deserve nothing at all. You seem incapable of grasping this simple concept.

  • JT

    Andrew H – an excellent description of the problem we find ourselves in, and a lucid summary as well. Thank you.

    The exchange above also draws out very nicely the myopia of many on the Left who are so wedded to ideology that they’re blinded to the nature of the problem itself. Thank you Boris for such an illuminating demonstration.

  • Boris MacDonut

    #70 Steve T. Any relation to Mr T? Or worse still Mrs T. You lot are stooping low to resort to accusing me of being silly. My comments are rigorously researched.I pride myself on factual accuracy, hence my chagrin at the waffle spouted by Andrew H off the top of his head. FYI.Because Edwina said nobody was starving doesn’t mean nobody is starving,but I was alluding to possible cut off points for Andrew’s draconic cuts in the future rather than what may exist now.
    #71 JT. Any relation to JR? Where do you get the idea I am on the Left? I did once join CND and tore up my Labour party membership in 1993 ,10 years to the day that I tore up my Tory party memebership. I am now Mebyon Kernow, and we are sort of left and right wing a bit like Barrack the Great.

  • Andrew H

    Good question and a difficult one to answer in the terms in which you asked i.e. A should get B, and X should get Y (which I think is a problem in itself given the heterogenous nature of people).

    I think the first thing to do is to curtail any further bank bail outs, which is of course now politicially impossible because the state now has a substantial share in something that would be worthless without the implicit guarantee of future state support.

    In an ideal world, if I had such a mandate, the first thing I would do would be to remove the stipulation that taxes must be paid in Sterling, so as to allow a functioning market in competing currencies.

  • Andrew H


    This would end the Bank of England’s (effectively the State’s, and the banks with reserve accouts at the same central bank) monopoly on the creation of currency and allow people to easily trade and exchange with currencies that are not gifted to the zombie banks in favour of everyone else, and that are therefore not affected by the distortion in prices caused by BOE money printing i.e. if people disagreed with the bank bailouts and continued QE they would have a way to avoid paying for it through inflation.

    With regard to public services, such as pensions, health care, social care, etc., people should receive an itemised tax bill describing where their contribution is spent, but also have the choice to opt out of specific state services and therefore reduce or increase their contribution as they see fit, and also seek services from alternative providers.

  • Andrew H


    Again the voluntary option to participate and the removal of the currency monopoly would stop the government from being able to offer artificially low prices on such services because they would no longer be able to rely on sneakily getting consumers to pay make additional payment (without realising) through inflation and borrowing without causing a corresponding currency crisis that would destroy the State’s spending power (it would also put the brakes on the state running spending programmes like a ponzi scheme, without resulting in the same end).

  • Andrew H


    I think if this could be achieved there would be no need for politicians to decree silly things such as “pensions can be collected at the age of X”, and there shall be “Y number of hospitals, and Z number of doctors”, which although it may suit or seem logical to the politician making such a decree, it doesn’t follow that it should suit each and every person’s varied circumstances, and results in clumsy “one size fits all”/”institutionalised” type services.

    That is to say there would be no more silly debate with regard to austerity/stimulus (in reality stimulus/more stimulus), government would offer services that adjust and change to suit peoples’ circumstances and their willingness to pay for it.

    It would also hopefully end the 5 year popularity contest of the demagogues and their coloured rosettes, each promising to spend more than the other in no specific way, and with no other way to pay for it than with ever more

  • Andrew H

    (continued, sorry for the abrupt cut off the last comment)

    grand and underhanded methods by which to steal it.

    p.s. this is answer to Boris’s comment at 69.

  • Andrew H

    @Critic Al Rick #53, and @JT #71

    Thank you, it has been an interesting debate.

  • Andrew H

    Final comment to Boris (I’ve not more time to spend on this debate),

    Before you get heated up about my comments from #73 and onward, in response to your question posed in comment #69, consider the following, why do we not ask politicians to decide how many bread rolls their should be, or how many bakers to bake them, or how much butter, and how many dairy farmer to provide it?

    Now imagine current government services, and all the argument, scandal and dishonesty surrouding them, and then ask yourself what would be the result if they did?

    Why do we largely leave to the market something as essential and crtitical as food production, and not other other services provide by the government?

  • Boris MacDonut

    #73 Andrew your answer to waht state provision for the elderly should be is to curtail bank bailouts and allow taxes to be paid in Euros. By the way you have two “first things” you would do.
    #74 If I opt out of public road provision,which alternative provider can I opt for?
    #75 “The voluntary option to participate” makes you sound like one of those loony republican preppers in the US.
    #79 Farming is one of the most heavily subsidised of all industries. Your arguments are tiresome faux libertarian.

  • Steve T

    @72 Boris – I would be proud to be a relative of Mrs Thatcher, the only strong leader this country has seen since WW2. Unelected union officials ruining the country – not anymore; foreign countries invading territory under British protection given a bloody nose; stupid EU demands handbagged. Where is her like now in our hour of need? Instead we have pathetic Cameron, Clegg who makes Cameron look good, and a rather stupid cartoon caricature leading the opposition ably assisted by Balls-up, both in total denial. We are in such trouble in this country but still the likes of you insist on free lunches for all.

  • Boris MacDonut

    #81 My God. I didn’t think anyone still harboured those wierd thoughts.

  • Steve T

    Boris – you accusing me of weird thoughts? That’s a bit rich, pot kettle black springs to mind.