The British must work longer into life or be punished by developing economies, according to the former head of the CBI.
Lord Digby Jones of Birmingham said it was no longer an option to retire in the mid 60s, as he gave the keynote speech at the Coventry and Warwickshire Chamber of Commerce annual conference.
“There was never enough money to pay pensions, it’s just that no one was around to find out,” he said. “There was a time you did the decent thing and retired at 65 or did the decent thing and retired at 67.
“I don’t think 67 or 68 is feasible, if a boy is born now there is a one in four chance that child will live to 100. China, India and Brazil will punish us.”
Huge jumps in life expectancy have seen costs shoot up for the Treasury, which is paying some pensioners for more years in retirement than they spent paying National Insurance as workers.
In the Comprehensive Spending Review in October 2010, the Government increased the state pension age to 66 for both men and women from 2020.
Lord Jones, who worked for 20 years at Birmingham-based law firm Edge and Ellison, was director general of the CBI for six-and-a-half years.
In 2007 he was appointed Minister of State for UK Trade & investment and became a cross bench life peer. He is also chairman of Triumph Motorcycles and a corportate ambassador for Jaguar and JCB.
Lord Jones said: “We need constant and deep reform of the public sector.
“We’ve got a Government that is cutting spending but keeping international aid the same.
“If a country needs a dam or an airport then that money may be used. We are creating wealth and jobs in another country.
“We want to be a country that looks after the starving.
“I want Britain to be first up to help, but not the other stuff where your money is being used to create jobs and wealth in developed nations. Germany and Canada don’t do that.”
Warwickshire County Council’s head of sustainable development Louise Wall told delegates that the economic performance of the region in the ten years to 2008 was poorer than the English average.
But almost all of the manufacturing sector is buoyant, with growth in low carbon industries, she said.
Ms Wall said that major developments in the region could create up to 80,000 jobs in the next ten to 20 years
Lord Green, Minister of State for Trade and Investment, who spoke via videolink, said growth is likely to be slow in internal markets for some time. But he added that there are many parts of the world that offer opportunities for British companies.
Amrik Bhabra, president of the Coventry and Warwickshire Chamber of Commerce, said: “There were several clear messages but it certainly shone through that confidence is key for the region. The fact we also launched our new campaign to get more companies from Coventry and Warwickshire exporting was very pertinent as so many of our speakers highlighted the importance of trading overseas.”
Lord Jones also told the conference not to be too hard on banks.
“The financial services equate to about 15 per cent of all the tax in the UK,” he said.
“I don’t want to be in the position where we wake up and they’re all gone. You can lend money from anywhere.
“We’re all a bit hypocritical. They had the stuffing knocked out of them. They’ve now got to find £5 to lend £1. Regulators were sleeping on the job.”
William Hobbs, head of equity strategy at Barclays Wealth, told the conference that while the eurozone, US consumer confidence and the uncertain future in Iran were all risks, threats to the UK economy were often exaggerated.
He said: “We don’t think base rates are going to change anytime soon but more quantitive easing will likely be announced in November. Confidence is the missing piece in the puzzle.”
Asked if they were seeing ‘green shoots’ in the economy, two-thirds of delegates agreed they were.