Committee Chair, Debbie Abrahams – on Saddleworth Moor in her Oldham constituency
We face a relentless dumbing down of pensions to a point where our latest pension champion failed her Maths GCSE on the grounds that she wouldn’t need Maths because she was going to be famous.
So it’s good to be reminded that those who Govern us take work and pensions a little more seriously. Yesterday the DWP announced the composition of its Work and Pensions Commitee.
The following Members of Parliament have been appointed:
|
Name |
Party |
|
Debbie Abrahams (Chair) |
Labour |
|
Johanna Baxter |
Labour |
|
Peter Bedford |
Conservative |
|
Neil Coyle |
Labour |
|
Steve Darling |
Liberal Democrat |
|
Damien Egan |
Labour |
|
Gill German |
Labour |
|
Amanda Hack |
Labour |
|
John Milne |
Liberal Democrat |
|
David Pinto-Duschinsky |
Labour |
(with one vacancy to be filled).
Stephen Timms has stepped down as Chair but following him and Frank Field will be a third Labour grandee, Debbie Abrahams.
Professional Pensions, that definitely takes work and pensions seriously has put together the above graphic, published Robin Ellison’s eviscerating blog and kindly give us a photo-montage of the MPs who will serve our interests in the next five years
We shouldn’t ignore the Work and Pensions Committee. It is an important break on the worst excesses of pension policy, it provides a sense check to the guidance given by our regulators and in its wider role, it looks at the benefit system and how the apparatus of the state pension is working.
Currently there is no agenda for the Committee, its website is devoid of interest, but we can be sure that just as in previous parliaments , we will have our crisis’ – out BSPS’ , our LDI’s and we will continue to see the WPC take evidence, deliver reports and exert influence as the principal oversite for the DWP and TPR.
If we want accountability, we want a strong and functioning WPC and I hope that the current committee will continue the good work of Committees before.
Timmy Mallett- Gemma Collins, if this is who we want to champion pensions – then they get no megaphone here.
But if the WPC want input on the important issues that face people as they save, stop working and live their later lives, they could do worse to read the work of some of the commentators on this blog.
The Wilson Room in Portcullis House, the new home of the WPC
A slight concern with this work and pensions committee is the relative lack of experience of pension matters
Agreed re the blogs.
Compulsory reading (also for all involved in the Industry, and this noble endeavour of providing a dignified age-wage in retirement ) should be the John Kay paper on the policy disaster visited upon our nation by (a lack of coordinated ) policy on pensions and investment,
And the Foundation Paper – why is Britain Stagnating, about which I’ve taken the liberty of repeating an earlier response on this blog. Sorting out the investment side of pensions, reversing 20 years of TPR induced dis-investment must be the priority and the only solution to the pension inadequacy from TPR legacy.
Re the Foundation Paper:
“It’s important to read the Paper.
It’s not about building houses!
No GDP growth then no pensions paid.
The issue can be distilled down to one set of facts:
– The UK produces much much less electricity (energy) per head than other 1st world economies (France 50% more than UK, and USA 3 times more) and
– what energy we do produce is at a multiple of the cost of our competitors
– If we follow this current trajectory, tinkering in political malaise, economic disaster is assured.
Other than over the short term, gross economic activity and output is a function of the amount and cost of energy. Simples.
During the 19th and 20th centuries, that access to energy was through decarbonisation – follow the output and the control of oil and coal resources and you can track the course of economic growth around the world over the last 200 years.
Everything we need, and do, to survive (food production, making equipment and machines, transport, homes/shelter, even our kid’s insatiably appetites for iPhones etc, etc) requires energy.
As a nation we are so inefficient at general production and vital infrastructure and so behind the curve, that it will take a Herculean effort to get our country back on track [from the Paper: “ • The planning documentation for the Lower Thames Crossing, a proposed tunnel under the Thames connecting Kent and Essex, runs to 360,000 pages, and the application process alone has cost £297 million. That ismore than twice as much as it cost in Norway to actually build the longest road tunnel in the world.” A lawyers dream !]
The Paper (not unusually – many spend side economists either overlook or don’t understand the supply side impact of pension investment) doesn’t comment on the critically damaging role of pensions in this, and in particularly of the DB disinvestment drag of the last 2 decades.
The UK DB Regulatory impact has had the same detrimental effect on our economy as if the Govt had set a fiscal policy to disinvest DB schemes out of growth assets/equities at a rate of say 1.5% p.a. for the last 20 years. If any other nation was to announce that now as a fiscal economic policy, there’d rightly be guffaws at the folly and warnings of the resulting economic doom to follow. And so it has come to pass.
To reinforce this dis-investment cult, UK DB pension regulation actually now defines taking ‘risk’ ( ie to invest) as a potentially criminal activity worthy of jail time (with hindsight applied) so bloodyminded determined were/are the unaccountable Brighton heavies to dissuade well-intended often volunteer representative Trustees of anything other than gilt “investing”. [of course, it’s a folly to think of gilts as “investing” for pension schemes on a whole system basis – it’s merely a tax deferral, as Gov’ts strip schemes today of investment assets selling / swapping for gilts in order to prop up our excessive social security/NHS bill, blindly hoping somehow future generations will find the ways and means (and the inclination) to pay the higher taxes our generation currently can’t afford and that will be needed to service the truly colossal gilt glut generated national debt in order to pay our pensions, please!].
The solutions are obvious and simple, but will require us to take our medicine. Less regulation, more private and public investment, and crucially reversing the strangling disinvestment mandate of TPR ( better still abolish TPR, by any objective assessment it has been disastrous for pension adequacy and economic investment and growth in our country) by requiring that DB schemes incrementally increase investment in growth and or infrastructure assets by only 2% p.a. compounding, as the small price for UK regulatory protection and continued tax favoured regime.
The main blocker to this will of course be “the industry”, that populated by the 55-65 aged cohort ( me too) who’ll spend more energy securing their tax fee cash, or the many who will ignore the now understood problems, looking instead to get at least one more super bonus out of the duckshoot of the ensuing bulk transfer frenzy to top up their own nest eggs.
Of the £50bn annual transfers, some c£10bn of that will end up as profits for the insurers, and padding of city and consultancy bonuses ( nb buy-in expenses, legal / actuarial etc at ‘only’ 0.2% -0.3% get lost in the roundings, but still that’s c£150m pa in consulting fees – you get a sense of what drives the advisory perspective; all wanting just ‘the one more big deal’). More depressingly, that £10bn of surplus/ value once transferred from Schemes can never ever benefit members or sponsors to whom it rightly belongs. But worse it’s further embedding a low risk low aspiration investment mindset, with the expected economic results.
Perhaps another part of the jigsaw will be positive age discrimination.
It’s seriously problematic that the industry and Trustee boards are massively under-representative of the under [50s]. It would be a bold and positive step to require every Scheme, master trust etc to have equal representation from each of the 5 working cohorts [ 20s, 30s, …60s], and also equal male/female representation. You can be pretty sure the working 20-45 year olds would not be choosing to transfer £10bn p.a. of surplus to the insurance clique, and they wouldn’t vote for continued disinvest now / higher taxes later mandates.
As I say, all involved and interested in pensions and in our nation’s ability to invest to pay future pensions, please take 5 minutes read the Paper, and then think what we in pension need to do to play our part in ensuring a better future, and selfishly to sustain an economy capable of paying our pensions.”
What a fascinating paper! It’s refreshing to see a thought-provoking analysis that challenges the status quo. I completely agree that it’s essential to examine who benefits from the current situation and to follow the money trail.
You’re absolutely right that in the context of energy, but more is not always better. In fact, innovative solutions that reduce energy consumption can have a significant impact on our environment and our wallets. That’s why I’m thrilled to share my own experience with a startup that’s revolutionizing computing by using light instead of electricity.
This game-changing technology has the potential to reduce energy costs by a staggering 80% in server farms alone. It’s a prime example of a solution where less is indeed more. And, as you mentioned, it’s a British invention that’s been designed and patented in the UK.
However, I share your concern that this innovative technology may be sold off to a foreign owner, potentially stifling its potential to make a meaningful impact. It’s crucial that we support and nurture homegrown innovations like this one, not just for the economic benefits but also for the positive impact they can have on our environment and society as a whole. EIS worked for this but under present regulations the individual would find it hard to subscribe from a pension.
Let’s continue to challenge the status quo and push for more sustainable, innovative solutions that benefit everyone, not just a select few.