This new paperback edition is as partisan as the original sub-title – How New Labour Betrayed Retirement – of the hardback last year. Alex Brummer of the Daily Mail is determined to make the case that every pension misfortune since 1997 was either the fault of, or made worse, by the Labour Government, and especially Gordon Brown. But he gets carried away by his own bile. The substantive material does not warrant 200 pages of, at times, tawdry verbiage and lunchtime gossip. With some good editing this could have been a succinct, polemical pamphlet.
Brummer leaves us in no doubt about his view of the Hotel Group of Gordon Brown, Geoffrey Robinson, Ed Balls and Charlie Whelan in one single, cynical act ending tax credits on dividend payments to pension funds. He thinks it destroyed the very fabric of centuries of carefully cultivated funds. As a pension fund trustee at the time, I don’t quite remember it like that. What I recall in the late 1990s was doing some very hard work to ameliorate the dreadful state our highly paid professional advisers had got us into. The way through the crisis was to spread the risks into the bond and property markets as well as tracking funds so we didn’t have to rely on dodgy equities.
In truth, pensions are incredibly complex, especially as we are living longer. A sustainable charge against New Labour is that they have become more complex since 1997. But the assertion that all the woes of pension funds and pensioners can be laid at the door of government is not. I am no apologist for New Labour but the years of contribution holidays by employers before 1997 – denuding pension funds of necessary investment income – was not the fault of the Labour Government. Nor was the greed of the private equiteers who demolished pension funds to finance debt-ridden takeovers. And it’s hard to blame Labour for the pension funds left high and dry when their companies went bust. In these cases, Labour did act to compensate to some degree those who lost out. It took some time and some pressure, but act it did.
Brummer also repeats the calumny about gold-plated public sector pensions and how these are ruining our public finances. I hope he has read John Hutton’s recent critique which demolishes this assertion so we may now get an even-handed and sensible debate. But, as with all the other parts of the pensions industry which have gone wrong, Brummer stretches the argument to make his case that Labour was to blame. There is no doubt that the pension lobby is strong and vocal and no doubt, too, that Labour faced challenges from it in government. But, ultimately, it was the greed of private sector capitalism which really created the problems. The sadness is that Brummer misses the bigger picture by seeking to make a narrow partisan point.
