Not for nothing is
this blog called brown girl OUTSIDE the ring – but even I am astonished at feeling
so queasy-uneasy about the much lauded pension rule changes announced last week
by Giddy Osborne.
Do we still not understand
that ‘choice’ is the standard political euphemism for ‘we’re not going to fix
the system so it’s everyone for themselves’?
It’s a classic
vicious circle. The measure is brought in because annuity returns are crap.
Annuities are crap because interest rates are crap. Interest rates are crap
because of the financial mess caused by poor regulation of the financial
industry. We are not out of the mess yet nor has ineffectual regulation been
forced to cowboy up. Liberalism, however, is being applied to pension savings.
In other words – we know the man-eating Lake Placid size crocodiles are out
there untamed, hungrier than ever but we’re letting the wildebeest loose from
their sanctuary anyway. WHAT CAN POSSIBLY GO WRONG?
Do we still pretend
not to know that ‘we trust people to make the right decisions’ means ‘we wash
our hands of this – and anyway we won’t be in power when the chickens come home
to roost (and find they have to live in a hole in the ground)’.
Have we learnt
nothing?
Do the government
not listen to Money Box on Radio 4? I don’t just mean to the whinings of the
Worried Wealthy but the other people; the ones who keep giving their 40 years’
savings to Nigerian princes, Ponsy schemes and non-existent plots of land on
the moon?
Let’s just reel
back a little.
What this
government and previous incumbents have shown us is that they can’t or will not
regulate the financial industry effectively. Add to that the voracious need of big
‘C’ capitalism for ever new sources of its life blood – easy money – and you
have a subterranean monster eating away at the heart of society, a barely
hidden insatiable parasite. We’ve administered some poultices, but it’s there
and it’s insatiable.
(I know – the croc
morphed into a sort of alien parasite – get over it)
What has choice meant
in terms the NHS? We haven’t the will to sort the problems and anyway we are
now doubled over with PPI (profit priority indigestion) so we’ll talk about
choice – which, as has been said before in this blog – means those with the
sharpest elbows can get themselves to where the service still works.
State schools are
staggering and stumbling through a maze of half baked schemes – a warren of
dead ends from academies to free schools, schools funded by businesses. Schools
are demoralised, slated by offsted or overcrowded because they climbed the
offsted ladder. Sometimes, it seems, the books are cooked or improvements made
by selective offering of exam options. Is it too much to suggest that we simply
need good teachers, classrooms that don’t leak and schools with playing fields
that haven’t been sold off?
Back to pensions.
As the welfare
state wobbles under the weight of ever increasing responsibility, never has
there been a time when that precious provision needs to be so carefully tended.
We are an old country and getting older. The welfare state was a vehicle meant
to transport us from cradle to grave. With the journey getting longer, people
who want a smooth ride may need more than one spare tyre.
And – with a
flourish – Giddy Osborne announces that people will be free to spend their private
pension pots how they like because people are to be trusted with their own money.
No new fiscal safeguards. Tadah! And Westminster plus the majority of the media
applaud this. And New Labour agrees. And it’s bollocks.
The answer to the
pensions problem (as with banking and insurance and mortgages and investments) has
always been to properly regulate the financial industry with real sanctions for
misconduct. This announcement is a tacit admission of failure. It is also an
admission that the big financial disaster that got us into this mess – where
the world of money now revolves round the spenders not the savers - is here to
stay for the foreseeable future.
This budget
bonkersness is a boon for the con man. It’s Christmas all round all year for
the Salmonella cruises and the manufacturers of silly cars. Listening to the
commentators extolling the virtues of ‘ordinary working people’ spending their
own money, one thing is clear – they have no idea, NO IDEA what it is like to
have never had to deal with a serious amount of money. If you’ve always had a
nice car and regular holidays it may be easy to see that you would never be
tempted to choose that sort of quick fix over longer term comfort. If you have
had plenty to do with money advisers throughout your life it’s not easy to see
how someone would be conned by a smooth talking arse in a suit. But people are regularly
conned and / or persuaded to make stupid decisions with their money. It happens
all the time but, until now, not with their pensions.