The compulsion question has been driven down Quango Gardens, that well-known cul-de-sac housing all manner of Blairite worthies locked in earnest debate about policies that the Government dare not contemplate, at least not this side of the next general election.
We have a Green Paper from the Department of Work and Pensions and a consultation paper from the Inland Revenue. Neither risks any contact with the nub of the gist, which is about the interface between the state pension and private provision.
The question is, if there is to be no compulsion to jack up our new business figures, what can the industry – defined for these purposes as life companies and IFAs – do to bring about this outcome?
Well, we can start by thanking our lucky stars that compulsion is still too rich for HM Government's stomach. Once you have compulsion, you do not need tax relief. When you have no tax relief, you have no packaged pension products at all. It beggars belief that there were senior figures in life companies lobbying for compulsion.
The life companies are more or less all in the ABI, whose most recent innovation is Raising Standards. In this journal on January 9, Aegon said that Raising Standards had “delivered clarity”. Really? I am told that the Scottish Equitable product still offers allocation rates up to 116 per cent. Does the consumer who invests £100 suddenly and by magic turn it into £116? I don't think so.
If the allocation rate game is not played to confuse the customer, what purpose does it serve?
With-profits funds that are not with-profits funds prompt the same question. Has Raising Standards outlawed them? Has it hell. It fails the sniff test and so will any initiative launched collectively by an industry that many people can now see is simply clinging on grimly hoping that something will turn up.
Which is just as well because, if the life offices did get together and create a successful “spend today, starve tomorrow” campaign, and if by some almighty fluke it worked, the outcome would be catastrophic.
Chancellor Gordon Brown wants you to save but only if you go on spending to shore up his growth forecasts for the economy. He wants two outcomes which are mutually incompatible. Forced by the application of electrodes to choose just one, he would have to pick the spending.
Then, as we know from other economies, compulsory saving actually tends to lower the savings ratio. This would not help.
Last but not least, if all the companies which got suckered into playing stakeholder suddenly got a raft of small contributions, thus lowering even further the average contribution, they would come under yet more financial pressure.
We can also eliminate any possibility of the IFA community getting together and making an impact. It cannot get together because there is no such thing as the IFA community anyway and, even if there were, it would not have any money over and above the handouts that fund IFAP in its entirety and subsidise Aifa.
This is not, however, a counsel of despair. People do tend to trust the salespeople (my New Year resolution was that I would never use the word adviser to describe a tied salesperson) and the advisers with whom they have done business. So let us get out there and tell it like it is.
“You cannot trust Government. Not this Government. Not any Government. Pension policy goes through a major spasm every four years on average. The only constant is that the value of what people get from the atate goes on falling over the long term. The only safe assumption you can make about the future is that, if you put nothing away, your nothing will grow. To nothing.”
The answer, if there was one, would be to sell, sell, sell. Except we cannot get PI. Bother.
Graeme Laws is a business consultant