Once Upon A Time In Scotland

Once upon a time, in a land not so very far away, a grumpy Scotsman called Greedy Gordon inherited a rich kingdom from a jovial giant called Kindly Ken. One of the first things Greedy Gordon did in his new kingdom was introduce a tax on pensions, making all his subjects pay him a percentage of their piggybank savings. Greedy Gordon also took away something called the 'Pensions-Earnings link', which tied the state pensions payments to the national average wage and ensured that pension payments rose in line with inflation. It's complicated; if you don't understand, ask your daddy to explain it to you when you get home from school.

Now, children, the important think to realise is this: if Greedy Gordon takes away some of the money from your piggy-bank, will you want to put more money into it, or less? That's right! Greedy Gordon's tax meant people in his kingdom put less of their money into their piggy-banks. With less money saved, people had to rely more on Greedy Gordon's welfare state when they grew too old to work.

Several years later, Greedy Gordon was counting out his money in his Scottish castle when he realised suddenly that the money he had wasn't enough to pay to all the poor people he had promised to help. "Och no!", he said. He needed another 40 billion pounds. Greedy Gordon's friends called this the "Pensions Black Hole".

"Help!" thought Greedy Gordon, "I dunnae know what tae do! If only I'd listened to Kindly Ken, he was always much better at adding up than me. I can only count up to 21 then I run out of fingers and toes... and things."

Some of Greedy Gordon's friends pointed out to him that his tax on pensions piggy-banks meant Greedy Gordon had taken 40 billion pounds a year from his people. Was it a coincidence that this 40 billion pounds was almost exactly the same amount as the Pensions Black Hole? If Greedy Gordon hadn't taken the money from the piggy-banks, he wouldn't now be in the pickle he's in!

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