OpinionSep 19 2013

Into the Labour bear pit

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Well I found myself in such a situation last week when I spoke at a debate in the magnificent Edwardian headquarters of the Institution of Civil Engineers, located in One Great George Street, an eardrum-piercing chime away from Big Ben and the Houses of Parliament. By the way, it is well worth a nosey around if you are ever in London doing some CPD training and have got an odd 15 minutes to spare – as is the Red Lion watering hole, a stone’s throw from number 10 and a hostelry steeped in political history.

I had originally been invited by the Association of British Insurers, an invitation I readily accepted given it was on a subject I purport to have strong opinions on: pensions. I know some readers would say accepting anything from the ABI is tantamount to committing a sin but I have always held the view that if you dish it out as a journalist (which I occasionally do) you have got to face the music when asked to do so.

But it was not until I got my briefing notes that I realised I was actually speaking at a debate sponsored by Progress, the New Labour pressure group which has the aim to promote radical and progressive policies for the 21st century.

It was not until I got my briefing notes that I realised I was actually speaking at a debate sponsored by Progress, the New Labour pressure group

Not only that but my three fellow panellists would comprise two Labour MPs (the wonderful Dame Anne Begg, chair of the works and pensions committee, and the charming and quietly effective shadow pensions minister Gregg McClymont) and a former adviser to Tony Blair (the ABI’s director of operations, Huw Evans). I felt like a lamb surrounded by three hungry foxes. Three Labour acolytes versus a representative from the somewhat right-leaning Daily on Sunday? Oh dear. Outnumbered. Outfoxed.

Apart from two horrible moments when first Dame Anne walked out (just as I was being introduced) followed by Mr McClymont (as I was speaking), the evening turned out not to be the blood fest I thought it would be (they walked out, they told me later, because they had to hurry back to the House of Commons and vote). In fact I rather enjoyed it in the Labour bear pit.

The debate was all about making pensions fit for 21st-century purpose and how we could encourage more people to save enough to enjoy a standard of living in retirement.

Dame Anne said auto-enrolment, fast approaching its first birthday, was key to getting more people to engage with pensions. Encouraged by the low rate of opt-outs reported by the likes of Legal & General, she said the real test for auto-enrolment would be in 2015 when micro-businesses (your local independent shopkeeper) will be required under the auto enrolment regime to offer pensions to their workers. She said it was imperative that auto-enrolment was a success and that it was not hit by yet another pensions scandal.

Mr McClymont, proudly sporting copies of his must-read Fabian Society pamphlet Pensions at Work, That Work, said pensions were a big issue that would not go away. He believed the key was to ensure pensions represented value for money. And the only way that can happen, he said, was through full charges disclosure.

Like Dame Anne, Mr Evans said it was key that auto-enrolment worked. Understandably, he then went on to highlight the work that the ABI had done to ensure people retiring were encouraged to shop around for the most appropriate annuity (through its retirement choices initiative and its annuity window). He also said it was crucial that a sensible debate was held on the future for higher rate relief on pension contributions.

I, sitting on the far right of the debating table, was left to the end. Surprisingly, I was much in agreement with what the three Labourites had already said. Auto-enrolment has to be a pensions success story, work pensions need to represent better value for money (something the Office of Fair Trading will address shortly with its recommendations for reform of work pensions ), and the ABI needs to build on its work in helping to improve retirement outcomes for hundreds of thousands of people every year.

I did add a few other ideas. They included an end to the constant political interference in pensions that leads to continual attacks on lifetime and annual allowances and which, in turn, breeds investor confusion and distrust. I also said it was crucial that the Isa regime was allowed to continue to prosper.

And not forgetting my audience, I acknowledged Labour’s work while in government in bringing into being the Pension Protection Fund and in coming up with the auto-enrolment regime.

Funnily, the only issue I raised that did not get debated afterwards was that of the pensions of MPs. I suggested they should move from defined benefit to defined contribution on the grounds that DC underpins auto-enrolment. Dame Anne and Mr McClymont were tight-lipped on this particular issue. I wonder why?

Jeff Prestridge is personal finance editor of the Mail on Sunday