It is simply indecent to cajole older people into unsuitable jobs by forcing them to live on £65.45 each week

In one of his more memorable flourishes, Neil Kinnock warned voters not to be ordinary, not to be young and not to fall ill under Margaret Thatcher. Enemies of the coalition might try and renew his edicts after Tuesday's budget. But even its sternest critics cannot plausibly reheat the final Kinnock warning – the warning "not to get old". George Osborne swung the axe at the disabled and the workless, but showed pensioners his softer side. While family benefits are being squeezed for those not deemed to need them, well-to-do seniors will cling on to their bus passes as well as their winter fuel cheques. The elderly are being exempted from disability cuts, and the chancellor imposed a new regime for uprating benefits – which will steadily ratchet up payments for the old, and ratchet them down for everyone else.

The fact that the over-65s are far more likely to vote than anyone else no doubt explains why our politicians are inverting wider society's fetish for youth. But in stricken times, the relatively kindly treatment of the elderly is kindness that comes at a cost. The government yesterday revealed it would make the sums add up by forcing today's workers to slave on, by going further and faster than Labour had planned in raising the state pension age from 65.

Deep groans soon echoed around the studios, as vox pops bemoaned the prospect of work-till-you-drop. The move provides a tempting target for the opposition, but it should pause before promising to die in a ditch to prevent it, because – unlike so many of the budget's cuts – this one has a cold logic. With life expectancy rising, anyone saving for their own retirement would have to devote ever more of their wages to achieve the same pension at a particular age. If people were acting individually, at some point their desire to stop working tomorrow would be tempered by their need for money today. There is no reason why collective policy should not respect the same logic. All the more so since the pensions minister, Steve Webb, seems determined to override business objections and scrap rules that allow bosses to turf workers out on grounds of their age.

There are, however, important objections to the detail of the coalition's plans – which go back to the great contrast between the gentle handling of the retired and the rough ride given to the rest. In this context, a rising state pension age threatens to become a moving cliff edge, which the vulnerable could fall off. Poor people in their 60s – and prospectively their late 60s – are often ground down by a lifetime of graft, and have shorter retirements to look forward to than their wealthier counterparts. They are more likely to be without work, and so are more likely to have to fall back on unemployment benefits which have grown continually meaner since 1979, and which require claimants to apply for all manner of jobs, without any thought about what is suitable for them – still less what they might like to do.

It is simply indecent to cajole older people into unsuitable jobs by forcing them to live on £65.45 each week, which is all that jobseeker's allowance provides. A new presumption in favour of working for longer must come coupled to support to make this possible, and the security of knowing that there is a good safety net if suitable work is not available. Unfortunately, the budget went in precisely the wrong direction, by scrapping a payment which rewards over-50s when they move into work, and by hastening the withering away of the benefits available in advance of retirement.

Pensions make up over a third of the total welfare budget, and the savings from paying them later are too large to ignore. But there is no reason why some portion of the cash should not be ploughed back into providing decent support for those who will find it most difficult to soldier on for their living. Such a strategy truly would fulfil the budget's mantra of tough but fair. Sadly, the budget did not deliver it.

Labour MPs don't mind being described as venal, misguided, or being in league with Satan, but calling them gullible idiots is an insult too far

Day two of the budget and Labour are doing their best to cash in. They should: that's their job. The trouble is that they can only do it by carefully ignoring the fact that the country was in a terrible economic state even before the election – and they might just have had something to do with it.

I was reminded of the journalist who was sacked some years ago. So he managed to get into his editor's house just as she was about to put it on the market, and hid a large dead fish in the bathroom. It proved impossible to ignore, and it got worse every day. Harriet Harman, pro tem leader of the opposition, is in the position of the owner, airily claiming that a spot of Airwick would soon fix that.

Ms Harman, who is showing some verve and spirit, accused the Tories of a cunning ruse to make pensioners think they were going to be better off than they would be. We were to read page 41 of the red book, which is the nation's accounts, a grandiose version of what better-organised people keep at home: "Groceries, £38.45, cleaning lady, £22.50, national defence £60bn," and so forth. This showed that the government had offered to give pensioners a rise based on earnings rather than prices – a year early.

This should be generous, since earnings usually rise faster than prices. But not next year. The opposite is likely to be true. According to the red book, the figure ministers had put aside to cover the increased pensions was "precisely nothing ... zero".

Mr Cameron had a reply that was so confusing that we suspected he didn't have a reply at all. He said that in Ms Harman's case, the red book was the "unread book". He went on to recall one of Labour's many darkest hours. "We all remember the 75p increase for pensioners," he said. "Under our system, that can never happen again," he finished. It was his third reply.

"Three-nil!" shouted one Tory backbencher, with wild optimism about the football match to come.

The prime minister said there was a £300m deficit in the pension pot. "They do not know this, the dupes behind the front bench."

Labour MPs bayed in mock rage. They don't mind being described as venal, misguided, dogmatic, having halitosis, or being in league with Satan, but calling them gullible idiots is an insult too far.

Mr Cameron was not giving way. "I think 'dupes' is an accurate description of what I am looking at."

He went on: "There was a £300m black hole, and you do not have to be a Star Trek fan to know that when you are in the black hole, you should stop digging."

And you do not have to be a Star Trek fan to know that a black hole is not a pension deficit, but a body so dense that even light cannot escape its gravitational force. It is tempting to say that description applies to several MPs, but I won't.

Labour MPs made a vain attempt to get the term "dupes" banned. The Speaker declared that it was "not a point of order, but a matter of taste". Quite meaningless, but it shut everyone up. At last.

Labour MPs don't mind being described as venal, misguided, or being in league with Satan, but calling them gullible idiots is an insult too far

Day two of the budget and Labour are doing their best to cash in. They should: that's their job. The trouble is that they can only do it by carefully ignoring the fact that the country was in a terrible economic state even before the election – and they might just have had something to do with it.

I was reminded of the journalist who was sacked some years ago. So he managed to get into his editor's house just as she was about to put it on the market, and hid a large dead fish in the bathroom. It proved impossible to ignore, and it got worse every day. Harriet Harman, pro tem leader of the opposition, is in the position of the owner, airily claiming that a spot of Airwick would soon fix that.

Ms Harman, who is showing some verve and spirit, accused the Tories of a cunning ruse to make pensioners think they were going to be better off than they would be. We were to read page 41 of the red book, which is the nation's accounts, a grandiose version of what better-organised people keep at home: "Groceries, £38.45, cleaning lady, £22.50, national defence £60bn," and so forth. This showed that the government had offered to give pensioners a rise based on earnings rather than prices – a year early.

This should be generous, since earnings usually rise faster than prices. But not next year. The opposite is likely to be true. According to the red book, the figure ministers had put aside to cover the increased pensions was "precisely nothing ... zero".

Mr Cameron had a reply that was so confusing that we suspected he didn't have a reply at all. He said that in Ms Harman's case, the red book was the "unread book". He went on to recall one of Labour's many darkest hours. "We all remember the 75p increase for pensioners," he said. "Under our system, that can never happen again," he finished. It was his third reply.

"Three-nil!" shouted one Tory backbencher, with wild optimism about the football match to come.

The prime minister said there was a £300m deficit in the pension pot. "They do not know this, the dupes behind the front bench."

Labour MPs bayed in mock rage. They don't mind being described as venal, misguided, dogmatic, having halitosis, or being in league with Satan, but calling them gullible idiots is an insult too far.

Mr Cameron was not giving way. "I think 'dupes' is an accurate description of what I am looking at."

He went on: "There was a £300m black hole, and you do not have to be a Star Trek fan to know that when you are in the black hole, you should stop digging."

And you do not have to be a Star Trek fan to know that a black hole is not a pension deficit, but a body so dense that even light cannot escape its gravitational force. It is tempting to say that description applies to several MPs, but I won't.

Labour MPs made a vain attempt to get the term "dupes" banned. The Speaker declared that it was "not a point of order, but a matter of taste". Quite meaningless, but it shut everyone up. At last.

The retired teachers from Ontario have invested their pension fund in several UK ventures - now they have bid for the high-speed railway

A retirement fund set up for state-school teachers in Canada sounds like a sensible, provincial operation – not the obvious choice to own a railway. But this week, the Ontario Teachers' Pension Plan was touted as a likely bidder for Britain's first high-speed railway, which the government put up for auction on Monday.

Tasked with looking after the retirement cash of 289,000 teachers, the fund is no stranger to snapping up British assets – it already owns almost half of Bristol airport, is buying Camelot (which runs the National Lottery), owns a chunk of Northumbrian Water and recently bought special-needs education and fostering provider Acorn. Closer to home, it part-owns an ice hockey team – the Toronto Maple Leafs.

It wasn't always so impressive – in 1989 Teachers (as it is more jauntily known) was run by the state and all its investments were government bonds. Now the plan invests in companies directly – cutting out the money managers who usually pick out private equity for pension plans – and has a staggering $96.4bn in assets. But sadly, unless you are willing to emigrate and discover a vocation for teaching, there's no hope of joining this golden pension scheme.