‘Embarrassing’: UK Labour’s rising star suffers major setback over pensions

I haven’t seen a headline like this before about a UK pensions minister and find it stupid. I sensed we were getting into personal vindictiveness a few months ago when at the Pensions UK investment conference. There was a hatred that was looking for a focal point and found it in “mandation” where prudishness went on display as fiduciary prudence.

We forget that since 2014, the investments that have been made into workplace pensions have been constrained by the charge cap that initially threw all money into passive funds, to keep workplace pensions solvent and latterly has allowed a price war to keep the money that has no regard for members and all regard for the commercial interests of providers.

To say that this is the first time that a Government has impacted pension investment is to forget the taxes imposed on certain investments by Gordon Brown and going back still further the restrictions on exchange controls that led funds to invest almost entirely in UK equities.

For ordinary people, the brickbats being thrown at Torsten Bell demean not just the Pension Schemes Act but the other great stuff that’s happening, in particular the CDC legislation that has gone though, the regulation that is being finalised and the Retirement CDC legislation that we should see this year.

My message to the many people in pensions who are using Torsten Bell in this prudish way, is “grow up”. Here is an article in an obscure political publication known as Politico. You may find it “gossipy”, it is aimed at those in the Westminster village and it reads pretty badly. Thanks to Jon Stapleton for bringing it to our attention

Onlookers see Torsten Bell rising up the ranks to chancellor, but a recent loss in his landmark pensions bill could be a major setback.

By Elliot Gulliver-Needham

At a conference on sustainable pensions in March, the audience settled in for a familiar script: a speech from the pensions minister droning on about the importance of their industry.

Instead, Torsten Bell presented them with something very different.

Using his keynote address, Bell went on an attack against his competitors in Westminster, referring to Reform UK supporters as “idiots” and “people that will destroy this country and our democracy.” Amid raised eyebrows, he then turned his fire on the Green Party, accusing it of “opposing anything required” to run a sustainable economy.

Last week, Bell suffered the first major setback as pensions minister as his flagship policy to use cash in pension funds to boost the British economy was rejected by the House of Lords and he was forced to significantly water down his plans.

It could spell major trouble for the frequently named rising star in the party, who has worked closely with the current Chancellor Rachel Reeves since taking the position, having led budget preparations last year. He is odds-on to be a candidate to replace his boss, if Thursday’s local elections go sideways and the prime minister opts for a major reshuffle at the top of his team.

Pensions ministers aren’t usually in the headlines. Pensions ministers don’t normally go on politicized rants at unexciting financial conferences. But Bell is not a usual pensions minister.

Bigger aspirations

A former head of the influential Resolution Foundation think tank and mastermind behind the infamous Ed Stone in the 2015 election campaign, Bell jumped into parliament in 2024 and was rapidly promoted to pensions minister.

The position has traditionally been seen as a temporary posting, gifted to MPs before being shifted around the cabinet to a better ministerial placement, meaning Bell is now the third-longest-serving pensions minister of the last 20 years, despite starting just over a year ago.

However, this may not reflect a lack of ambition, with plenty pointing to a possible role of Chancellor of the Exchequer for Bell.

“I don’t think Torsten Bell sees himself as being the pension minister for more than about the next 10 minutes,” said David Moffat, executive chair of The Platforms Association.

The industry has expressed plenty of concern about his aspirations. “I always get quite nervous with someone like Torsten Bell as the minister, because he wants to make a name for himself in a space that really you shouldn’t be able to,” added one industry figure, granted like others in this article anonymity to speak freely.

“He definitely sees himself in cabinet,” they said. “He does not see himself being a junior minister for long.” An individual close to Bell said they had never heard him talk about becoming chancellor, but asked: “What MP hasn’t thought about if they were prime minister one day?”

Betting odds currently have Bell as the fifth most likely candidate to become the next chancellor, behind party grandees like Ed Miliband and Yvette Cooper. With whispers of a reshuffle if Labour performs poorly in this week’s local elections, it could be the opportunity for Bell to compete with his boss.

Shadow City Minister Mark Garnier, who has frequently clashed with the pensions minister, told POLITICO that Bell thinks he could be chancellor, though of course argued he shouldn’t be. “There are an awful lot of people I come across who sound plausible, and who think they can do these jobs, and clearly can’t,” he said.

Reserve power 

But a defining moment of Bell’s career in parliament hasn’t gone the way he wished.

Bell was handed a humiliating defeat late April after he was forced to water down his landmark “reserve power,” which would allow the government to force pension funds to invest a minimum proportion of their assets into U.K. firms and private assets. He infamously told the industry to “chillax” in response to widespread concerns about the power.

The mandation power was toned down via significant guardrails with a more limited timeframe to force the Pension Schemes Bill through parliament, after facing strong opposition from the Tories. One minister conceded it had been “gutted” compared to the original policy.

“It’s clearly embarrassing for Torsten as it has been quite a high-profile campaign,” added another industry figure.

“The handling of some of the more contentious parts of the bill have not been done well,” said a third industry figure. They described Bell as “clearly well-meaning and super intelligent but [he] tends to come across as arrogant and there have been instances where he has not taken opposing views seriously enough.”

“If anything, the government’s fixation with the reserve power to mandate investment has overshadowed more important elements of the bill, such as the scale and value for money tests proposed,” said Jamie Jenkins, director of policy at Royal London.

However, a Labour official, granted anonymity as they were not authorized to speak on the topic, told POLITICO that they didn’t see the incident as a failure. “The bill passed in its entirety, with the reserve power in there,” they said. “The Conservatives claimed they’d fight to the death before caving in.”

Bell’s attempt to force the policy through the House of Lords despite peers’ obvious opposition to mandation was cited by industry insiders as a sign of his stubbornness, and what ultimately led to the strife in passing the bill.

Complex character

That approach is also clearly evident in Bell’s public persona, frequently openly sparring with critics in a job that is rarely at the center of controversy. Shadow Pensions Minister Helen Whately mocked him in parliament last month for blocking Times journalist Tom McPhail on X (formerly Twitter) for disagreeing with him.

But one thing Bell’s critics haven’t been able to ignore is his passion for finance.

“Bell has brought energy, drive and buckets of enthusiasm and positivity in his role as pensions minister,” said Patrick Heath-Lay, CEO at People’s Pension. “Even where government and the pensions sector do not agree, the minister’s knowledge and enthusiasm for his brief are clear.”

“He really wants to change the pension system for the better, and he’s clearly intellectually curious,” added Ashok Gupta, director of think tank New Capital Consensus.

Even Garnier, his fierce opponent, described Bell as an “encyclopaedia as data,” though of course he argued he “doesn’t have the mechanism to be able to turn it into policy.