Ed Miliband is no longer the most dangerous man in Government
Since the election, many have come to see Ed Miliband as the most dangerous man in the government. His capacity to both drive up costs at every level of the economy, and simultaneously to undermine our energy security, coupled with the determination and vigour with which he has set about these tasks, seemed hard to beat.
However, cometh the hour, cometh the man and Torsten Bell may be that man.
Bell currently has two important jobs in government, both of which concern us here. Firstly, in his role as pensions minister, he is driving through significant structural reforms in the UK’s private pensions. This will ultimately lead to fewer, bigger, better run schemes and in this endeavour, he enjoys widespread support. However, he is also writing into legislation a power which would enable him (or a future Minister) to direct pension schemes in how they invest money on their members’ behalf. In this, he is launching a direct assault on the well-established fiduciary powers and responsibilities exercised by trustees, who manage their members’ savings for the sole purpose of maximising their retirement income. Instead, Bell wants to be able to redirect that capital to help deliver on his government’s economic agenda (or for whatever other purpose a future government may deem vital and in the national interest).
When confronted on this issue by assembled representatives of the pensions industry at our annual conference in Manchester last week, Bell dismissed all opposition and arguments with an airy wave, telling us we should just ‘chillax’ (yes, he really said that). His message was that we should regard the provision of pensions as a ‘vocation’. This characterisation reinforces the suspicion that it will not be long before he exercises his newfound powers of mandation; a vocation is much easier to over-ride than a profession. Given the government’s majority in the Commons, it is hard to see how Bell can be stopped, but I do find it mystifying that opposition parties have not challenged this power-grab more vociferously.
In addition to bringing our retirement savings under state control, the second reason to fear Bell, is that he is now helping Rachel Reeves write her Budget. Having boxed themselves in with rash pre-election promises, ruling out tax increases on earned income and on VAT, and with some tens of billions of pounds needing to be found, Torsten Bell is set to become the King John de nos jours: Hikes on accumulated wealth, including further extending inheritance tax, increasing dividend tax rates, increasing capital gains taxes, cutting the pension tax free lump sum, abolishing higher rate relief on pension contributions, are all up for grabs.
Bell doesn’t favour a straight wealth tax, rightly arguing it would be difficult to implement effectively but a tax on property wealth seems a strong bet. Council tax reform is long overdue and whilst it would be deeply unpopular, at this point whatever they come up with is likely to be deeply unpopular. Once you’ve priced that in, it makes sense to go big, make the structural changes, hit higher value properties with significantly higher council tax and syphon some of it off for central government.
Torsten Bell is widely tipped to rise higher in government. Whether he ever gets the opportunity, will largely depend on the success of the Budget in a month’s time. As well as his own career, our retirement savings and the future of the economy depend on him doing a good job.
Here’s a link to the full Times article https://www.thetimes.com/business-money/money/article/ed-miliband-is-no-longer-the-most-dangerous-man-in-government-686jmcwr3
