The government could be forced to do a U-turn on amendments to the bill – such as the extension of the Pension Regulator’s moral hazard powers – unless it makes serious concessions, according to Lord Oakeshott, the Liberal Democrats’ work and pensions spokesman in the House of Lords.
“We have concerns about the regulator’s power. We think the rules and guidelines should be clearer,” he said. “While we are in favour of clarity, we also acknowledge that quite a bit of the private equity business model focuses on closing down pension funds and contributing an absolute minimum.”
Alongside supporting the amendment to set up an independent commission to review public sector pensions, tabled by fellow Liberal Democrat peer Lord Kirkwood, Oakeshott took issue with the cost of public sector pensions.
“When we suggest doing something jointly with the Conservatives, they don’t want to know. It’s clearly something that Cameron doesn’t want to lift the lid on. Is he going to just smile sweetly and run away, or is he serious about the problems facing the country?” he asked.
As part of a discussion on pensions policy, Oakeshott rounded on the government’s approach to personal accounts, declaring the party was prepared for a battle to ensure appropriate financial advice is provided to vulnerable groups, particularly the over-50s.
“The evidence shows many in these groups will lose a very high proportion if they invest in personal accounts, because they will lose their means-tested benefits.”
Oakeshott also attacked the trend over the last six months for trustees to focus on cost when offloading liabilities to buyout firms.
“You are playing with fire if you shuffle off your liabilities to anyone but a well-established company. I wouldn’t touch anyone with a bargepole that wasn’t established and strong like Prudential, Legal & General or Norwich Union.”
He added: “Quite frankly, trustees should consider their own position if they get seduced by sexy new buyout operators.”
Tom Willetts
