Monday, April 09, 2007

More on Brown and the pensions raid

The reaction of some Labour commentators and bloggers to the Brown pensions debacle has been to ride to Gordon's aid and denounce the whole thing as Tory-driven opportunism. This is endearingly tribal stuff but arguably misses the point. Brown's decision to raid pension funds was a colossal miscalculation. There has been a crisis in occupational pensions since 1997 with many final salary schemes closing to new entrants and some even collapsing altogether. Scrapping dividend tax credits did contribute to the problem and Brown was warned of the consequences.
Bear in mind that all this took place against a background of clear demographic trends (low and decreasing birthrates, more and longer living pensioners) as well as widespread agreement among policy makers of the importance of individual asset management and Brown's decision seems even more arrogant and short-sighted.
The depressing litany of failure which followed - pension schemes collapsing under the weight of their liabilities and hard-pressed pensioners deprived of the pension benefits they'd paid for - is something Brown has to take some responsiblity for.
Getting the obedient Ed Balls to make excuses for his decision simply won't do. A genuine leader faces the music himself.
Similarly, it won't do for partisan commentators to write the whole episode off as just another storm in a political teacup. The lost livelihoods of pensioners are not something to be treated as just another pawn in a political game.
The rightwing press and Conservative politicians have not invented this story. They would be unable to make such political capital from it unless it did strike a chord.

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