Yesterday was the first of the TUC’s pension conference and in a single session, the conference debated “investing in a just transition to a low carbon economy”. Guy Opperman spoke and was well received by Chair Paul Novak and by the 150 odd delegates who were noticeably easier about his agenda in the chat rooms than they had been openly on his previous visits to Congress House.
Opperman spoke of his work to “free up” the opportunity to invest the long-term capital sitting in workplace pensions in the just transition. He sounded and looked more at home in this environment than last week when he was urging those who managed the money to do better. Strangely for a Conservative politician, his position on the planet, on financial inclusion and social purpose seemed more at home in this environment than at the PLSA investment conference.
This was a deeply serious discussion grounded in the context of a pandemic now a year old and of lockdown – but a few days from it’s anniversary. The TUC has clearly found a place for itself in this “just transition” and the debate had none of the tub-thumping razzmatazz I associate with some of their conferences. This was more in line with the dignity of the movement my father and grandfather talked to me about. Their grounding in west country Methodism linked their Liberalism to the social agenda of the Labour Party. With a Conservative Government , a Liberal party that has lost its way and a Labour movement in deep shock, can we turn to the Unions again for leadership?
There is certainly an agenda for change. Over the next few days, the conference will be debating
- Extending workplace pensions coverage to those workers currently excluded
- Ensuring more workers can benefit from collective pension schemes
- Rethinking the balance between state and workplace pensions to tackle poverty and inequality in old age
Fair pensions for all
“Pensions” are not just a minority sport – tax wrappers for the wealthy. They make the difference between a financial future in later age of state and family dependency and financial independence and dignity.
The TUC’s agenda is spot on and I am looking forward to attending these sessions , even though they clash with the equine investment conference in Gloucestershire.
The pandemic has accelerated parts of the economy that we once thought marginal, our towns and cities buzz with electric bikes and scooters delivering us meals from restaurants that have been thrown a lifeline by the gig economy. The Unions have fought and won rights for the Uber drivers and they can do more. Workplace pensions need to be included as a right for those doing these important jobs. If you have an FT subscription you can read here about the fate of migrant workers trapped on British farms since Brexit, the unions need to include all groups whether urban or rural, no-one’s life or livelihood is more special than another’s,
We can vote at 18 but young workers have to wait till they are 22 to be enrolled (though they have and usually miss out on) the right to an employer contribution before then. Many are excluded from auto-enrolment because they do not earn enough and many who earn enough find much of their pay is not pensioned. Many who earn under £12,500 are denied the promised Government incentive to save because they find themselves in the wrong kind of scheme. The Unions can and I hope will, champion the reforms promised in the 2017 auto-enrolment review and due to be delivered in the time of this parliament.
Having played such a pivotal part in opening CDC to large employers, the Unions should now recognize the role of the commercial master trusts in spreading the coverage of the CDC concept. While single employer DC schemes work out how to consolidate themselves into multi-employer schemes and the contract based workplace pensions struggle to introduce investment pathways, it is these master trusts that offer the best hope of ensuring more workers enjoy pensions as well as pension pots.
Finally the Unions need to be clear about their position on redistribution of the nation’s wealth through the state pension and through the tax system. The maintenance of the triple lock well into the third decade of the century is a great achievement for Britain but we still have a poor state safety net relative to other economically developed country. We cannot go soft on the continued improvement of the state pension as it is the way to ensure dignity in retirement for everyone – and that means everyone.
As for tax, the agenda for change has never been more open. Post pandemic, all bets must be off. We cannot allow austerity 2.0 to mean those who use public services, lost public services while those who have wealth, keep it in tax privileged savings vehicles that contribute little at a great opportunity cost to the public purse. We do need proper reform of the pension taxation system to remove the huge inequality that means the vast majority of tax-relief benefits those who least need it.
We need fair pensions for all and judging by yesterday’s session, the TUC and its unions are in a position to help deliver them.