For a man who, in his words, has just been “routed” in the general election, Gregg McClymont is in a surprisingly buoyant mood.
To be fair, the former shadow pensions minister’s heavy defeat at the hands of the Scottish National Party was a surprise to nobody after a disastrous Lord Ashcroft poll in January put him 18 points adrift.
“In some sense I was fortunate because I had the Ashcroft poll in late January showing me 18 points behind, which was by far the worst,” he says.
“It left me with no illusions about the task but you have to retain some hope otherwise it is difficult to get out of bed every day campaigning.
“However, the numbers we were finding on the ground – and we had a very intensive campaign so we had a lot of data – were not far out from the final result. One factor we couldn’t predict was turnout, which was 10 per cent higher than the last election and the vast majority went to the SNP.”
Faced with a seemingly hopeless task in his constituency of Cumbernauld, Kilsyth and Kirkintilloch East, McClymont and his team’s “gruelling” campaign included 15,000 conversations with voters in the months ahead of the election. It made little difference and, ultimately, the SNP swept all before them on 7 May, seizing all but three seats in Scotland. So where did it all go wrong for Labour?
McClymont traces the party’s troubles to the death of the iconic Donald Dewar, the inaugural first minister for Scotland, in 2000.
“In the short-term it went wrong during last year’s referendum, insofar as a significant proportion of what had previously been core Labour support found themselves convinced by the Yes case and voted for Scottish independence, and then transferred over en masse to the SNP in the general election.
“Longer-term the Labour party’s brand in Scotland has been in decline since the death of Donald Dewer. After Donald died, the Scottish public increasingly saw Labour as not up to the job. There is a younger generation in Scotland who probably aren’t aware it is the Scottish Labour party that delivered the Scottish Parliament, with no help or support from the Nationalists.
“But identity politics has been on the rise. That has been a 40 or 50-year process, although the referendum clearly accelerated that.
“In my part of the world, the Yes stickers and the saltires remained on many peoples’ cars after the referendum. The simple explanation for the election result is that nationalism happened.”
McClymont, like his opposite number Steve Webb, served an entire term in the pensions brief – an unthinkable level of consistency compared to the ministerial merry-go-round of the previous Labour government.
Despite having no background in the subject, McClymont gained a number of significant policy “wins” during his tenure, most notably pressing the government to cap charges for auto-enrolment and forcing policymakers onto the back foot on annuity market reform.
And then the Budget happened, plunging the insurance sector into chaos. Was this chaos replicated in the Labour ranks?
“I remember when Osborne announced the flexibilities. There is a Labour ‘war room’ and the call went out to me to explain what was going on to Ed Miliband and Ed Balls,” McClymont says. “I wouldn’t say it was chaos but it was certainly interesting and unexpected.”
Labour’s response to the bombshell was to back the policy in principle, caveated with three key policy tests:
- Ensuring people have independent support to maximise their retirement income
- Ensuring people on low to middle incomes can access good value pension products
- Ensuring the reforms do not result in extra costs to the state
But did the party consider opposing the reforms – which most agree go against its natural paternalistic instincts – outright?
“The temptation when you are faced with an announcement like that is to strike out in a new direction to maintain profile,” McClymont says.
“But my view was the policy was right for pensions. So I would rather be in the right place looking towards government than just striking out for the sake of headlines.
“That was difficult because, to some degree, politicians’ currency is profile, but I have never been as interested in that as some. So I was happy to reduce our own exposure on the issue if that meant the policy was going in the right direction.”
But surely Labour’s challenge to the government could have been meatier? After all, the reforms were introduced at breakneck speed with key pillars, including the role of advice, guidance and extra protections for savers, rushed through at the very last minute.
“There was internal debate but we had to consider how the government would react. This is where it was all very political – what Osborne was trying to do was put in place something that was very popular and then get Labour to oppose it. That was the strategy.
“There were some people within Labour – MPs and backbenchers – who would have liked to see the party oppose this. But compulsory annuitisation at 65 is problematic to say the least and the reality is we’ve gone from one extreme to another. It might well be that in the long-term the best place to be would be somewhere in between.”
Should this see the reintroduction of a minimum income requirement for flexible drawdown below the previous level of £20,000?
“If I had won and I had been minister, I would have been looking in that direction in the longer term, although that would depend on how people responded to the freedoms.
“People look at what happened in the 1980s with pensions misselling but history never repeats itself. The bigger impacts are likely to be harder to measure and will be slow burners.”
What’s the best bit of advice you’ve received in your career?
No one will ever read your PhD.
What has had the most significant impact on financial advice in the past year?
In the long term, the ending after 90 years of compulsory annuitisation.
What keeps you awake at night?
Andy Murray’s second serve.
If I were in charge of the FCA for a day I would…
Be poacher turned gamekeeper.
Any advice for new advisers?
Keep it simple.
1993-2006: Educated at the Universities of Glasgow, Pennsylvania and Oxford
2006-2010: History lecturer at St Hugh’s College, Oxford
2010-2015: MP for Cumbernauld, Kilsyth and Kirkintilloch East
2011-2015: Shadow pensions minister
Present: Visiting Fellow at Nuffield College, Oxford