Category Archives: Policy review
Labour’s Shadow Pensions Minister Gregg McClymont and I, are today publishing “Pensions people can trust” as Labour sets out its ambition to end private pension rip offs and create the world’s best private pension system for British pensioners.
The Policy Review document, developed over months of consultation, sets out Labour’s new policy agenda highlighted by Ed Miliband, who talked about taking on private pensions rip-offs at this week Press Gallery Lunch, and just months ahead of the October launch of the ‘auto-enrolment’ system which will see an extra 10 million automatically brought in to private pension schemes in the coming years.
Labour legislated for the new system of private pensions for all with cross party support following the Turner Report. The new “something for something” pensions see workers’ contributions equally matched by government and employers.
Labour is determined to be the party of hard-working savers. That’s why I’m saying very clearly today that I want to see the best private pensions system, working for people who do the right thing and save for the long term.
Right now, a worst case scenario could see a pensions saver lose up to half of their pension thanks to hidden costs and charges. That’s wrong and it shouldn’t be allowed.
We all know we need to save more for the future. That means we need a system that builds your pensions pot, not eats your pension pot.
We’ve got some great pensions companies in Britain. But with an extra 10 million about to be brought into private pensions we’re determined to make sure savers are served by every pensions company playing to the standards of the best.”
Gregg McClymont MP, Labour’s shadow Pension’s Minister added:
“We’ve set out where we think the current system does not work for pension savers. The government should deal with these issues as a matter of urgency. In the coming months we’ll be talking to people up and down the country to see how we can get this right, because with the introduction of auto-enrolment just round the corner, we’ve got to get this right.”
The Policy Review document;
∙ Spells out the costs and charges savers can face, and the problems in the system – hidden charges, rip-offs in the annuities market, and penalty charges for people who change jobs and exit charges for savers switching schemes.
∙ Looks to the Australian system where the implementation of the Cooper Review is set to create a simpler and more cost effective system from 2013 by opening up the scheme to new levels of transparency
∙ Addresses the root causes of the problem from – lack of simplicity, transparency, accountability, scale and restrictions placed on the low cost high quality national not for profit Trust – NEST
∙ Includes comments from across the industry including representatives of; The Pensions Specialist, The True and Fair Campaign, The Saga Group, First Actuarial and Hargreaves Lansdown PLC, as well as Lord McFall, the former Chair of the Workplace Retirement Income Commission.
Notes to Editors
Attached below is the document “Pensions people can trust.”
Selected Comments from the document:
“If the pension is to re-engage the trust of consumers then transparency of costs, charges and restrictions is an absolute requirement. This transparency must cover all costs and charges, not only those directly paid by each individual member but any charges which will reduce the return on their investments. As an industry these charges are known as they contribute greatly to the profitability of pension providers and fund managers and their shareholders. This information should be freely available as it clearly is in the public interest. A pension plan is a long term commitment for both parties and long term relationships must be based on trust and honesty.”
Douglas R.G. Baillie, Senior Partner of The Pension Specialist
“It is vital that customer interest is looked after better by the annuity market. Currently, most people are at risk of buying the wrong kind of annuity and obtaining a poor rate, with nobody obliged to advise them of what they need to consider before buying this irreversible, once-in-a-lifetime product. Anyone in poor health, or who has a partner, or who wants inflation protection may not realise that they need a special type of annuity until it is too late. Commission is dedicated from the pension fund to cover advice, even if no advice is given. This is not in the customer’s interest.”
Dr Ros Altman, Director-General of the Saga Group.
“ Hargreaves Lansdown believes that the pensions industry should always look to the best interests of investors. The special restrictions imposed on NEST simply make pensions more complicated and for this reason we support the proposal that the restrictions should be lifted. NEST will serve a useful purpose as an underpin for auto-enrolment, and any commercial company that fears its own offering is not competitive should look to the quality of their own product or service, not seek to restrict NEST”.
Ian Gorham, Chief Executive of Hargreaves Lansdown PLC.
The Comments provided by stakeholders in the attached document illustrate their view on a particular policy issue. Their Comments do not necessarily imply that they support all the views expressed in this document and they do not imply that they support the Labour Party.
At conference this year we published four reports which draw together what we heard from the public over the last year, and some of the emerging conclusions and findings from the shadow cabinet-led policy groups. These documents will now form the foundations of our policy work over the next year. If you’d like to debate these in your local Labour Party of CLP or trade union, let me know!
There’s now just over a month to go until the deadlines for submissions to Labour’s ‘New Politics, Fresh Ideas’ policy review and ‘Refounding Labour’ organisational review.
We want to hear from you. If you can, come along to one of the special member consultation meetings organised for you.
Click here to find out about the times and dates of meetings in your area.
If you can’t make a meeting click here and tell us what you think.
Since January this year Labour members like your have had 2.1 million conversations with people on the doorstep.
You will already know what the priorities of your community are from talking to people.
Click here to share with us your feedback from the doorstep, as well as your own views and ideas.
With just over a month left, we hope you’ll get involved today.
Co-ordinator of Labour’s Policy Review
Chair of the National Policy Forum
- A socially mobile Britain: Here’s the link to a crucial new piece of research from Resolution Foundation on progress on social mobility. As you can see their top-line: “long-range upwards mobility (defined as moving upwards 3 or more deciles) actually increased by 22 percent in the 2000s in comparison to the 1990s
- A less mobile US: The British story is a sharp contrast to the US. Here’s a great piece from Lane Kenworthy on what’s been happening to social mobility in the US, where Lane concludes;
“The large increase in income inequality has not been offset by a rise in mobility at the top”.
See also The State of Working America
- Where the jobs need to come from. The absolute key to social mobility in the years ahead is a good supply of new jobs. That’s why Industrial Policy has become so important. This week, there were some good articles on why we need a new industrial policy here in the UK. Here’s James Zhan, from the UN, on what it’s a good theory. Peter Mandelson’s speech on lessons for the UK is here. What a sharp contrast to lack of any clarity about the Green Investment Bank in the news.
- A new welfare state. With a good supply of new jobs, a renewed welfare state becomes important. This week in the House of Commons, we debated the Welfare Reform Bill. What has clear is that there are now two views of the welfare state crystallizing in politics. The Tory view – repeated over and over – that the welfare state is nothing more than a safety, and Labour’s view, that the welfare state belongs to everyone and helps all of us get on in life.
- A debate for Europe. Finally, we’ve seen this week that this debate isn’t just a debate for the UK – it’s a debate right the way across Europe. The New Statesman has the full transcript of David Miliband’s superb speech on the state of European Social Democracy. Here’s the link to Policy Network’s excellent new State of the Left blog
- China’s National Peoples’ Congress is this weekend – the richest 70 delegates are worth some $75 billion. Bloomberg. The FT on why the margins are just as important as the conference floor. Geoff Dyer reports on personal changes ahead
- Pressure on wages in the West. Perhaps a contrast. US figures this week reveal despite slightly better employment news, pressure on wages is strong. Brad Delong with the story. Here, in the last quarter private sector pay grew by just 1.7%. ONS has the stats
- Squeezed Middle. An important report here from US think tank CAP. The debate in Britain is gathering pace. Here’s the link to Ed Miliband’s speech, George Osborne’s rather hopeless response, and the launch ourDWP policy review, which will take on a lot of the questions posed in this debate. The Resolution Foundation recently launched their major inquiry into the question.
- Interest rates. One view on the ECB from Paul Krugman. Others, look to the week ahead in the UK. WIder perspective from Brad DeLong.
- The week’s economic data. Here’s the TUC’s Richard Exell with a great summary.