Ed Miliband is no longer the most dangerous man in government
Forget the energy secretary, it’s the minister rewriting pension rules and lending a hand on the budget that you need to worry about
Since Labour took power many have come to see Ed Miliband as the most dangerous man in the government. His capacity to drive up costs at every level of the economy and simultaneously to weaken our energy security by switching to less reliable renewables, together with the determination and vigour with which he has set about these tasks, has seemed hard to beat.
However, cometh the hour, cometh the man … and Torsten Bell may be that man.
Bell has two important jobs in government, both of which concern us here. Firstly, in his role as pensions minister he is driving through significant structural reforms in private pensions. This will ultimately lead to fewer schemes that are bigger and better run, and in this endeavour he enjoys widespread support.
However, he is also writing into legislation a power that would enable him (or a future minister) to direct pension schemes in how they invest money on their members’ behalf. In this he is launching a direct assault on the well-established powers and responsibilities exercised by trustees, who manage their members’ savings for the sole purpose of maximising their retirement income.
When confronted on this issue by assembled representatives of the pensions industry at our annual conference in Manchester last week, Bell dismissed all opposition and arguments with an airy wave, telling us we should just “chillax” (yes, he really said that).
His message was that we should regard the provision of pensions as a “vocation”. This characterisation reinforces the suspicion that it will not be long before he exercises his new-found powers of mandation: a vocation is much easier to override than a profession.
Given the government’s majority in the Commons, it is hard to see how Bell can be stopped but I do find it mystifying that opposition parties have not challenged this power-grab more vociferously.
In addition to bringing our retirement savings under state control, the second reason to fear Bell is that he is now helping the chancellor, Rachel Reeves, to write her budget.
Bell doesn’t favour a straight wealth tax, rightly arguing that it would be difficult to implement effectively, but a tax on property wealth seems a strong bet.
Council tax reform is long overdue and while it would be deeply unpopular, at this point whatever they come up with is likely to be deeply unpopular.
Once you’ve priced that in, it makes sense to go big, make the structural changes, hit higher value properties with significantly higher council tax and syphon some of it off for central government.
Bell is widely tipped to rise higher in government. Whether he gets the opportunity will largely depend on the success of the budget next month. As well as his own career, our retirement savings and the future of the economy depend on him doing a good job.
As with all additional powers being taken on by Government, you have to consider how a Government of an entirely different political hue may use that power.
We need to consider how a Jeremy Corbyn Your Party lookalike or a more extreme form of Richard Tice’s Reform UK could use that power to further their political goals.
Labour believe a command economy is more efficient than society in allocating it’s wealth.
That is the socialist way isn’t it?
I find it interesting that Rachel Reeves and Torsten Bell see people with money simply as being those who are ‘rich’
They don’t consider that ultimately anyone with money has earned it, been taxed on it, and has chosen to save it or invest it, rather than spend it.
Essentially a double tax on saving, vs their low tax stance on earning and immediate spending.
I assume Rachel Reeves and Torsten Bell look at the USSR as some kind of utopia we need to revisit?
This strategy works for a time, until all the wealth is gone. And then what do we do? Where are the means, and the incentivised people, to build enterprise and take risks with their capital to build something?