Ageing and Pension Reform Around the World

Evidence from Eleven Countries

Edited by Giuliano Bonoli and Toshimitsu Shinkawa

This book comprehensively documents developments in pension policy in eleven advanced industrial countries in Western Europe, East Asia and North America. In order to explore what population ageing means for the sustainability of pension systems, the authors present a detailed review of pension policy making over the past two decades and provide up-to-date analysis of current pension legislation. They examine the factors that can facilitate or impede the adaptation of pension systems and the features that shape and determine reforms. They also highlight the fact that although the path of reform taken by each country is somewhat different, the processes at work are often very similar.

Chapter 6: UK Pension Reform: A Test Case for a Liberal Welfare State?

Peter Taylor-Gooby

Subjects: economics and finance, public finance, politics and public policy, public policy, social policy and sociology, ageing, comparative social policy, economics of social policy


Peter Taylor-Gooby BACKGROUND: THE UK POLICY CONTEXT The UK combines a majoritarian polity with a liberal welfare system. State pensions have always been relatively weak compared with those elsewhere in Europe. The self-consciously right-wing Conservative government of Mrs Thatcher undertook a radical expansion of private pensions in the 1980s, seeking to extend them from the dominant form of provision for higher-income people to the dominant form for the whole population. This involved cut-backs in state pensions and deregulation of the private sector in accordance with a general philosophy of ‘rolling back the state’. The New Labour government from 1997 onwards retained the themes of constrained state spending and reliance on competitive markets, but sought to redirect the liberal system towards welfare goals by expanding specific services, most notably the National Health Service, providing targeted benefits for poorer groups and regulating the private sector more strictly. This approach was legitimated as consonant with social democratic citizenship ideals through an ideology of equality of opportunity presented as a ‘third way’. In pensions, the government has expanded means-tested provision as a pensioner ‘tax credit’, but is finding difficulties in designing a regulation regime that both delivers secure affordable pensions and is acceptable to the private sector. UK experience offers an interesting test case of whether it is feasible to combine welfare and market liberalism. The case is particularly valuable, since the UK contains the most centralised system of government authority in Europe, currently administered by a reforming centre-left party with an exceptionally strong...

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