Red Rose-tinted Glasses and the Pension Protection Fund

Another excellent post by ex-TUC pensions expert, Tom P, in his “Labour and Capital” blog. Tom has a dig at the Tory dominated Financial press who constantly attack the government for “interfering” in their industry. If they were just left alone everything would just be sweetness and light. Yeah.

It beggars belief that anyone in the British Financial services industry think that they can rest on their laurels and be trusted to be left alone? Time and time again, the industry has proved itself incapable of self-regulation and driven by short term self interest. I’m not just sticking the boot in over present day difficulties over the US sub-prime mortgages and Northern Rock. In my life time, there has been a constant drip-drip of financial crisis’s and scandals by so-called “respected” Financial institutions. Do I really need to list them all?

Tom contrasts the collective failure of the industry to do anything about companies that go bust and break their pension promise, with the success of the Pension Protection Fund (PPF) set up by the government. Which within only 3 years of its existence is already protecting 41 schemes and over 12000 pensioners, paying out £1.4 per month? A further 225 schemes and 118,000 members are being assessed for help.

The hypocrisy gets even worse. Many of those who failed to do anything about this problem before the government stepped in, then incredibly began to complain about the failure to protect those who schemes failed before the PPF was set up. Tom points out that the government once again responded by introducing the financial assistance scheme. A bit late admittedly and much chivvied on the way, but better late than never.

Tom concludes that "If I take my red rose-tinted specs off I can see that Labour's record on pensions is not without blemishes. However on the specific issue of protecting pensions where employers have become insolvent it has a very good story to tell.

Tom, put your specs back on mate, they are not “rose-tinted” in the slightest. This government with pensions at least, is doing what it says on the side of the tin. A true left of centre progressive government that is prepared to actively intervene into the market to protect ordinary people. Not only vulnerable pensioners whose schemes have gone bust but to also vigorously regulate schemes to ensure that they remain solvent in the future.

A government that recognises that most personal pension plans only benefit the financial industry and the rich, have intervened again to provide State run quasi-compulsory, Personal Pension Accounts.

Most importantly, the government has also intervened via pension credit and fuel payments etc to (dare I say "redistribute"?) pour money into the pockets of the poorest British pensioners.

They have done this without scaring the horses. In private at least, I am sure that the more intelligent City folk realise that there are limits to what “free for all” capitalism can achieve and that there is a positive role for the state. However many simply do not have the intellectual honesty to admit it.