This blog is about the parade of negativity that has been displayed by Reform and the Unions this week and why this is not what inspires workers (we used to call them the working class).
Paul Nowak is head of the Unions and a traditional spokesperson for what used to be called the left, Richard Tice has been speaking on behalf of Reform who are also a workers party, albeit a right leaning organisation. Both see the way to win the minds of people who work as winnable by a stream of negativity towards ostentatious wealth.
This morning Novak is negative about banks and gambling companies. On Monday Richard Tice was negative about public funded pensions
This negative headline is accompanied by a very depressed looking Paul Nowak, General Secretary of the TUC. It is easy to see why, Reform are undercutting the unions when it comes to negativity, laying into financial institutions “ripping off” pensions (LGPS) on Monday.
Here’s Nowak’s solution to winning “working class ” minds
This battle for worker’s hearts is being fought in a way that is unlikely to inspire many of us. I consider myself a worker because I work, I hope that makes me working class.
Work , money and pensions
If you look at Reform’s suggestions for reforming LGPS they really centre on cutting out cost by moving large amounts of money managed actively and with purpose into passive management at low cost because it simply accept the market’s verdict. This is not the direction taken by other large funded pension funds in the UK or around Europe.
Recently, People’s Pension kicked out State Street and replaced them with active managers who had purpose, yesterday it was announced that the largest Dutch fund was kicking out its passive managers (BlackRock is mentioned but LGIM had 15bn Euro taken from them (even larger than the 14bn Euro from BlackRock that made the headline)
PFZW did not say this was political (an attack on US finances) , why should they when LGIM (a British manager) lost even more. This was about the future, the sustainability of Dutch pensions and the environment pensioners live in.
The “sustainability pivot” is a movement to have purpose in investment, what People’s stated was their reason for change and what PFZW, which oversees €248bn of pension assets for more than 3mn Dutch healthcare workers, had decided to do.
It costs more to be purposeful, it is an investment – passive investment is not purposeful, it is a negative acceptance of what the markets decide. This is no way for fiduciaries to accept the future (IMO). Nor is the way that Governments should behave, that goes for left and right wing worker’s parties.
I do not remember the Labour party of Gordon Brown and Tony Blair being unremittingly negative in the way that Nowak is arguing, nor Thatcherite policies being as negative as Tice and Farrell are arguing. Both sides had upsides, for both growth of the economy, not diminution of financial institutions , was at the centre of policy.
I think it is at the centre of this Government’s policy, I am pleased that our Pension Minister has been drafted into the Treasury to help set a society focussed budget and hoped that it will bring workers with it.
The Government should listen to both Nowak and Tice, both have identified weaknesses in the support offered to pension schemes and to the wider economy but negativity is not the answer that we want to our recent poor performance. Neither People, nor Nest nor PFZ” in the Netherlands see the answer in passive acceptance of the market’s verdict, they see a more active, focussed and purposeful form of investment as the privilege of collective power. Nest and People’s do not have €248bn of pension assets today but they will together early next decade. LGPS has more than that now and does not need to be passive.
There is complacency to be identified and cleared out by Reform and the Unions but there is also purpose which must replace it and this is why we should not vote negatively either at elections or with our money. I hope that that is the message that Reeves and Bell are keeping close to their hearts as they prepare for a budget we now know is 26th of November,
