There is an interesting session that starts at 14.28 and wraps up at 14.56 with Sophie Singleton and Helen Forrest- Hall representing the Society of Pension Professionals and Pension Management Institute respectively.
Unexpectedly to me and most probably for those in the room including the PMI and PPP was not just a supportive Shadow Pension Minister but a most truculent Pension Minister who has strong words.
The session had started convivially enough with the Shadow minister clearly not in favour of a backstop of mandation. The PMI and PPP were worried about market interference , fiduciary integrity and unhappy members . For the consultants, reserve power with a sunset clause would get in the way of investment decisions and deprive the opportunity for power.
The threat of the power would be bad enough. But Singleton saw private market funds coming onto the market , satisfying the calls for value for money. There was joy at the thought of competition with overseas funds and a free market.
I suspect that this was too much for the Minister who had his hand up at 14.39.
Torsten Bell asked the pair to “reflect on the consistency of the argument they made“.
There was a “collective action” from the pension industry. 
The argument between Singleton and Bell that carries on for some minutes ends with an accusation from Bell that the pair might gently think about the “consistency of their views“. The Minister gets an admonition from Singleton in particular that he misrepresents the market while Bell finishes “you give answers which say you are very happy with the status quo“.
The Pension Minister made it clear there was one reason to mandate, to make sure that the Mansion House covenant was not getting carried out and wouldn’t be so long as competitive DC plans beat each other up with cut-throat pricing.
Here he is word for word
“When you speak to the industry, particularly in private, it is very clear that there is a risk of a collective action problem.
“Under previous Conservative Chancellors, the industry signed up to commitments that it has not been delivering.
“Why has it not been delivering? Because of the collective action problem, because of the risk of being undercut by somebody else who is not making that change, because of the nature of a market that is too focused on cost and not focused enough on returns.
“It is easy to join people in being anxious, but we have to ask ourselves something. There is a reason why the first Mansion House Compact was not delivered.
“Do we want to be here in 15 years saying, “Actually, we all signed up to it and said it needed to happen, but it hasn’t”? No—I am not prepared to do that.
“Change is going to come. Everybody says that change needs to come because it is in members’ interests. All the reserve power does is to say that it is going to happen.
The Minister came back at the end of the day where he had another go at the position of the PMI and SPP. I do not get the feeling he is in any mood to give in.
The session went on to look in detail on value for money, investment in private market and a detailed discussion on how the consolidation of small pots would make a difference for providers and members. The argument was made that small pots were bad for the commercial value of DC.
There was a discussion towards the end of the30 minute session which touched upon the arrival of secondary legislation for CDC and Superfunds but in no detail other than that these would help. There was a further call for a slashing of the PPF administration levy.
“The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted to no council and senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.” Adam Smith
Killer quote Tom McPhail!
Thanks, Tom, for bringing to one of Henry’s blogs a view from a good old Scottish economist and philosopher, in a text written during the Scottish Enlightenment about the relationship between society, politics, commerce and prosperity.
Other possible quotes include (for LGPS watchers):
“The abuses which sometimes creep into the local and provincial administration of a local or provincial revenue, how enormous soever they may appear, are in reality, however, almost always very trifling, in comparison of those which commonly take place in the administration of the avenue of a great empire. They are, besides, much more easily corrected.”
or this one:
“There is no art which one government sooner learns of another, than that of draining money from the pockets of the people.”
Yet the late JK Galbraith, a more recent political economist for whom I also have enormous respect, warned that “a sharp and obvious distinction must be made between what was important in 1776 and what is important now. The first is very great; the second, save in the imagination of those who misuse Smith as a prophet of reaction, is much less so. . . . Smith is not a prophet for our time.”