Despite being a Labour MP he has hailed the late Baroness Thatcher as a personal 'hero' of his; he was named in 2008 as one of The Telegraph's 100 most influential right-wing thinkers; and he has always been an advocate for the state providing only a small role in the provision of welfare.
With this in mind, the recent Pensions Freedom report from the work and pensions committee should not come as much of a surprise, in that the committee has recommended more of an onus on providers to ensure a better decumulation strategy.
The same inertia that has led more than 9 million people to date to remain in a workplace pension should be applied at their retirement date, so they do not just end up with cash in low-interest accounts, but at least are defaulted into an appropriate form of decumulation strategy.
Moreover, the National Employment Savings Trust (Nest) should have its remit extended from an automatic enrolment workplace pension provider to a form of 'automatic decumulation strategy provider'.
The report summarised: "We recommend every pension provider offering drawdown is required, by April 2019, to offer a default decumulation pathway suitable for their core customer group.
The government is creating a pathway to retirement that will blind all of us as to the imminent destruction of the welfare state as we know it."These would be subject to oversight by existing independent governance committees and subject to the same 0.75 per cent charge cap already in place for accumulation in automatic enrolment.
"People would still be free to choose to invest and spend their own money as they wished. But if they did not make an active choice, they would move into a suitable and regulated default product."
So if you don't make an active choice at retirement, the provider with whom your workplace pension was invested will make that choice for you: a form of pension income by default.
It sounds sensible: use people's natural behaviour against them. I mean, for them. For the greater good (the greater good). But there are issues with this approach, as Simon Harrington, Pimfa’s senior public policy adviser, has warned.
"We agree with the Committee that a properly functioning pension freedoms market consists of a virtuous circle of better-informed customers ditching providers and demanding cost-effective products.
"However, we believe that the recommendations put in place by the Committee are a retrograde step to achieving that. We are not philosophically opposed to the introduction of default pathways, but we need to be realistic about the fact that their introduction will more than likely see individuals choosing them as a path of least resistance.
"We have two concerns surrounding this; namely that drawdown will be marketed as a default choice in a manner similar to annuities pre-freedoms and that individuals will remain with their provider and not engage on the open market to best assess their options. In our view doing so will increase rather than reduce the potential for long-term consumer detriment."
The committee's suggestions, on the surface, appear to want to avoid a situation where silly people do not make the best decisions at retirement with their cash, despite the signposting to advice, despite the promotion of Pension Wise and free guidance services.
My concerns with this are manifold. Firstly, the report made it abundantly clear the majority of 55-year-olds haven't bought flashy cars or massive villas on the Costa del Sol. No Lamborghinis in the streets of Leamington Spa. No 12-cylinder engine BMWs in Bournemouth.
It has stated most people have been either putting their money into low interest rate cash accounts, however, or opting for transfers. Again, there has been no clear detriment so far as a result of these decisions.
The implication, of course, is that money will run out for people doing big transfers or getting over-excited about drawdown or seeing their money eroded by inflation.
And this means they will have to rely on that same welfare state that Mr Field, the chairman of the committee, has said many times in the past should only play a limited role in supporting individuals.
What this report is actually doing, therefore, is not simply suggesting that providers could do more or provide more choice, or give people a default option to be helpful to the majority of Britons.
It is setting Britain up for a future where there are minimal state benefits. A future where the state pension is a relic of the past. A future where any fault in a lack of proper funding for later life is firmly the consumers, the providers and/or the advisers. Not the fault of the state.
With the government having already put in place a default pathway to saving, and now recommending default pathways to pensionhood, I fear the details of how these will work will blind people as to the underlying, overarching, all-encompassing ulterior motive of all the political parties.
That is, to create a pathway to retirement that will blind all of us as to the imminent destruction of the welfare state as we know it.
simoney.kyriakou@ft.com
