August is usually referred to as the “silly season” in terms of news items. Because so many people go away on vacation, newspapers have very little to work on so that any stories that emerge during August are over-hyped and get more attention than they normally deserve.
Therefore, it is generally in August that politicians seek to get some easy publicity by giving interviews and speeches, which they hope will get excessive publicity without rigorous examination by the few people left holding the fort at the news desks while everyone else cavorts on the French or Italian Riviera.
Labour Shadow Pension Minister Gregg McClymont’s attack on the fees charged by pension providers obviously falls into this category. Mr. McClymont is righteous in his indignation about the poor outcome for pensioners from their savings and he is very sure where the blame should lie i.e. with those dastardly pension companies who have the cheek to charge for the services they provide instead of running their businesses on the not-for-profit basis so beloved of the Labour quango mentality.
(Incidentally, have you noticed how MS-Word’s thesaurus tries to substitute the word ‘guano’ for ‘quango’ in its auto-correct mode, which makes me credit Microsoft with a better grasp of political reality than I’d ever suspected before.)
Unfortunately, the Financial Times, in which his interview appears, gives Mr. McClymont a free ride in the piece, reprinting his words verbatim without any challenge. “Rip-off” pension fees and provider’s “refusal’ to tell savers the extent of their charges” are thrown out without any reference to the fact that charge disclosure approach has been dictated by the FCA (formerly FSA) for years. Providers can’t deviate from this set approach without risk of being accused of trying to mislead clients.
The fact that the general public obviously don’t understand these disclosure documents points to a failure by regulator rather than by the providers, a fact conveniently ignored by the politicians who would much rather get the audience hissing at the wicked private companies rather than let them realise the failure of the public sector regulators, the very regulators whose salaries are actually being paid for by the taxpayer.
Labour leader Ed Milliband tops this up by saying that the high fees charged by pension companies is the ‘next big scandal’ to hit Westminster. This is rich, considering the fact that the loss to individual pensioners from charges by the pension providers is minimal compared to the scandal of the excessive pensions to the public sector being maintained behind a screen of silence – levels of pension which are inappropriate to today’s economy and will lead to a new North/South divide in the country, only this time between public and private sector retirees.
The silly season may mean that news is thin on the ground but that really is no excuse for the FT allowing the opposition to get away with putting the frighteners on private sector workers and directing their anger the wrong way while allowing them to hide the fact that the private sector is paying far more to support public sector pensions than they are contributing to the pension providers’ profits.
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Photo credit: MekQuarrie / CC-BY-SA-3.0
@Exaxe Agree with much you say ... but regulations set the floor, not ceiling, for disclosure.
— Alistair McQueen (@pensionsmcqueen) August 20, 2013
— Tom Murray (@TomMurrayDublin) August 20, 2013