It’s not the first time that a French government has tried to inject a greater element of universality into its arcane system of welfare provision. The Juppé plan, in 1995, tried to curb rising costs partly by imposing spending limits, and by trying to bring the pension rights of miners and railway workers into line with other groups. It also proposed universal rights to health care and guaranteed access. One prominent trade unionist called that idea “the biggest rip-off in the history of the French Republic. … the end of the Sécurité Sociale.”
The current system of pensions is costly – it’s long been the case that pensioners in France are on average better off than workers. Clearly, part of the government’s agenda over time has been to cut the cost, and that is the source of many of the protests. If cost was all it was about, there are other things that the government could have done – raise the pension age, increase contributions, increase the number of contribution periods required, and so on. But there are lots of other problems in the system. The shift to precarious labour and the problems of switching between different pensions rules can shut people out. With 42 distinct pensions regimes, the system is horrendously complicated. It takes years (literally) to work out what someone’s pension is going to be; often the calculations begin long before a person reaches 60 and are not finished until after the person retires. As the government plan says,
personne ne sait exactement ce à quoi il a droit. Le système est illisible, complexe, et crée de la défiance.
[Nobody knows exactly what they’re entitled to. The system is incomprehensible, complex and it creates distrust. ]
The proposed alternative is outlined in the government plan (the link is in French). The main elements are:
- a universal scheme for everyone – one of the principal aims is to remove inequities between people currently under different regimes
- a points system, in place of contribution periods, to determine entitlement
- an increased minimum pension
- retention of retirement at 62 (that is early by European standards, but worse than some French regimes currently offer)
- credit for every hour for which contributions are paid (seriously!)
- improved protection for people whose contributions have been interrupted through care, unemployment or sickness
- full transparency, through a personalised record of contributions and linked entitlements
- a commitment to balance the books – the current system runs perennially in deficit
- transitional arrangements for current workers
- a new system of governance. There is a commitment to consult about the value of points, but overall the new system will reduce the role of the ‘social partners’ including trades unions.
Something that isn’t explicit in the plan is the distributive element. It’s been reported that the proposals are regressive: the contributions required of very high paid people will be 2.8% above 120,000 Euros a year, whereas under that level the contribution will be 28%. However, the 2.8% is purely redistributive; it will yield no benefits for the contributions.
Both sides of the argument are right. On one hand, the government is proposing a scheme that should be less complex, fairer and more inclusive. On the other, the objectors will be trying to defend a scheme which, for all its irrationality and complexity, has delivered far better benefits than a more orderly set of schemes could ever have offered. There will, of course, be vehement protests – it’s the French national sport, and they do it so well. But the protestors, mainly from the left and the trades unions, are protesting against the idea of universality and state welfare, and from a British perspective, that’s a difficult position to hold.