If the currency of the years to come is measured in our capacity to defend ourselves (hard power) where does the currency get created?
Our prime minister has spoken over the weekend of the need for us to bring forward money to re-arm Britain against a threat from Russia and those lined up with them
The big picture of Starmer’s speech is that the UK is already at war. At home we are living with the inflationary shock of Vladimir Putin’s invasion of Ukraine, we are rightly spending money to aid Ukraine, and we face both cyber attacks and indirect attacks on our democracy.
There seem two ways to pay for necessary increases in defence (reliance on the USA is no longer one). The first way to pay is to cut Government spending and that will hit pensioners in terms of health, benefits and pensions (the state pension is not a benefit like pension credits but both could be at risk).
The other way for more money to be set aside to defend ourselves is for Britain to grow. This is the route embarked on by this Government in 2024 which has so far has not turned up.
I saw one speech by Torsten Bell, at the Pensions UK investment conference nearly a year ago where the Pension Minister asked the audience to “Get Real” about what funded pensions could do. I applauded this at the time and in a couple of weeks I expect to hear more at a repeat of the Investment Conference.
If we do not want pensions to be cut, we must allow them to help the country grow and that means turning up the heat from the back thrusters of DB plans, turning DC saving into DC pensions and by accelerating something which brings the best of DB and DC together – CDC.
It is no use us going into huddles and debating what we are going to do. We as a nation are not growing but we are required to spend more money defending ourselves. We must either shrink pensions or abandon the de-risking of our pension system and “GET REAL”.
If I was writing for Torsten Bell, better still – if I was Torsten Bell, I would contextualise pensions within the threats that Britain face and make the speech once again a call for action from funded pensions. The Pensions Bill is nearly an Act, CDC legislation is now passed and we need only the CDC Code for completion of a new style of workplace pension.
It is time to wake up to the enormous business of pensions which can revive much of British productivity which has been asleep for two decades. It is simply not good enough to say we cannot afford to take risk, taking risk is how you get growth and getting growth pays for us to defend ourselves and have a proper healthcare – a proper financing of growing old.
We really have to look to the decisions we are responsible for individually and come together in Edinburgh and agree collectively to take responsibility. Whether in the LGPS, USS and the Railways – where there is still DB accrual, whether in the 75% of closed and private DB plans or the huge number of employers funding DC pensions for staff, there must be action. We simply can’t sit in our pension conference seats and listen, we must get back to our businesses and get the money set aside to pay pensions, invested. Britain must grow to meet the cost of defence.
