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&#39Labour is teasing the market on compulsion&#39

The Government is teasing the industry with speculation about compulsory pensions so providers will keep selling loss-leading stakeholder, claims Shadow Work and Pensions Secretary David Willetts.

Speaking at a conference of influential thinktank the Institute for Public Policy Res-earch in London this week, Willetts said it is convenient for ministers to allow the debate around compulsory pensions to rumble on so that providers will carry on selling the product at a loss in the vain hope that it becomes compulsory.

He believes the pension industry will stick with stakeholder and operate on unpro-fitable terms while it is under the impression that the Government is considering making it compulsory.

He thinks the chance of ministers biting the bullet on bringing in further elements of compulsion is slim.

Willetts is holding a pension summit this week with representation from the pension industry, trade unions and the business community to develop the Conservative Party&#39s pension strategy.

As part of a panel discussion at the IPPR conference, Willetts, Liberal Democrat work and pensions spokesman Steve Webb and work and pensions select committee member James Purnell said cross-party political consensus was achievable on pension policy.

Willetts said: “I am very cynical about the compulsion debate. The industry will continue selling stakeholder at a loss in the vain hope that the Government makes it compulsory. You are being teased. It is very convenient for ministers to have the compulsion debate around.”

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