The welfare state is unravelling

David Willetts: believes the solution to the pensions time-bomb is to make the old pay more

When I was a college psychology student, the conclusion presented to us at the end of our studies on the NHS was that it had become a victim of its own success.

Its achievements - in practically wiping out many debilitating diseases, vastly increasing life expectancy and growing, without any apparent limits, to encompass all conceivable elements of health, from gluten intolerance to 'depression-related' boob-jobs - meant, in addition to a declining birth rate, it had become unable to support itself.

Yesterday's revelation, that there will be 80,000 centenarians in 30 years and a staggering 510,000 by 2066, extends this argument far beyond the NHS, however. The very same malady afflicting the health service - too much of a good thing - has become an existential crisis of the welfare state itself.

Before I continue, it's worthwhile defining the welfare state, in contrast to a social security safety net. The latter, the best examples of which can be seen in Hong Kong, Singapore and the United States, is a system whereby the state does little to nothing to support individuals in the course of their lives but is there to catch them if they fall on hard times.

This is generally defined as something that could happen to anyone against their best efforts - i.e. rendered unable to work through an accident, bankrupted by a failed business venture or bearing very disabled children.

A welfare state, by contrast, seeks to assist all citizens - not just the weakest and most vulnerable - 'from the cradle to the grave'. Hence why, before the Coalition Government repealed it, we had the grotesque situation in this country of millionaires receiving universal child benefit payments.

But, with astronomical levels of debt, a ballooning deficit (despite 'cuts' made by the Government), the relative economic decline of the west and an increasing population with a declining number of working-age people means the size of the state is going to have to shrink to an unprecedented degree - the only question is when, and where.

The answers given are very revealing about human nature, the culture of this country and the inherent weaknesses of democracy. The solutions given in answer to the question of more centenarians, for example, have been exclusively aimed at the elderly themselves - as though they are an alien species that can somehow be treated in isolation.

Hence The Times reported that 'academics and some politicians' - including cabinet minister David Willetts - believe 'society would benefit if fewer benefits went to the elderly and there was more spending on the young'.

Translation: take from the weak, the dependent and infirm and give to a group of people who, by definition, are strong, independent and - given half a chance - the wealth creating demographic of our society.

Other suggestions have been that, to support those living past 100, the retirement age ought to extend into people's 70s and beyond or that workers should simply save more for their retirement. There is some merit in the latter suggestion but many people cannot do this and it is by no means an adequate solution in isolation even for those who can.

At no point has it been suggested that the way to support, with dignity, those who have literally given their lives in service of society and the state is to drastically reduce the scandalous amount of public spending elsewhere.

How can it be just that we are effectively talking about plunging the elderly into even greater depths of poverty while the state is still so morbidly obese with waste and unnecessary, even counterproductive, spending?

How can this be in any way defensible when we are spending billions of pounds on families in a very different demographic - in which no-one has ever worked and have no intention of doing so - to have a house, an income, free medical care and support for as many equally parasitic children as they like, all on the public purse?

All while we require an ever-increasing flow of immigrants to do the jobs these leeches feel are beneath them - many of them taking two, even three, jobs at a time - such is their extraordinary work ethic. This country is notorious for allowing - even encouraging - people to get something for nothing and yet, astonishingly, our 'best minds' are suggesting it is the elderly that ought to pick up the tab.

Why are we not talking about scrapping child benefit? Of abolishing maternity and paternity leave? Of privatising the NHS and opting for a cheaper, more effective, system of state-backed insurance (à la Germany and France)? Of privatising schools and instituting a voucher system? The Coalition Government has taken tentative steps to strip the system of incapacity scroungers and save £3.75bn in the civil service but there is far more to do in closing the £80bn black hole in supporting future pensioners (i.e. us).

Unfortunately, the likelihood is, these things won't be discussed. The reason is mainly down to human nature and its corresponding expression in the political process. Generally speaking, facing a catastrophic situation, people will tend to ignore it until the shit really hits the fan by which time, of course, it's too late and everyone's absolutely covered in shit.

Witness every single stock market bubble in history, the absolutely insane policy of the last 70 years of borrowing and spending without giving any thought to how the money would be paid back and the fact that European politicians are systematically driving the whole world back into recession through their stubborn refusal to abandon the euro.

Witness, too, the ease by which politicians - Labour ones in particular (Gordon Brown) - can bribe electors into voting for them with promises of yet more state spending. This gives rise to a situation in which no party would dare suggest the kind of spending cuts that are actually needed because their opponents would merely deny their necessity and steal the election.

Funnily enough, this didn't seem to be the case before universal suffrage. Even the Labour party was built on the idea that, if you did not work, you did not eat. Those who were too idle to do so - and thereby pay into system - would receive nothing out of it. Its founders were very clear in seeking to build a political movement for 'the respectable working class'.

Victorian prejudices, you might say. But as yet another shockwave smashed through the stock exchanges of the west yesterday, our whole system of credit-based finance and debt-fuelled public spending is staring down the barrel of a gun. If we - bankers, politicians and voters - continue to blindly make the same mistakes of 1929 and 2008 and kid ourselves into falling for the same old fantasies, as we clearly have, we may well find ourselves sliding backwards, as civilisations have before us, to a very grim - you might say Victorian - future.