His attack angered many in the industry struggling to see what is so “wild” about their warnings when the Government’s own figures reveal many of the personal accounts target market will see negligible benefit from personal accounts.
Speaking at a Conference fringe event earlier this week, O’Brien was unapologetic about the fact that the review of means-testing and its conflict with personal accounts will not conclude until the Bill has been through the House of Lords.
O’Brien also accused the media and industry pundits of focussing on personal accounts as the big change in 2012, when he argued that it was the auto-enrolment factor that is the major change.
Of course, this is an important development and could help many people plagued by indecision and confusion to save for retirement when they otherwise might have put off the decision until too late, but until the means-testing conflict has been addressed, the plans are flawed.
The problem for O’Brien is laid bare in the Department for Work and Pensions’ own figures.
In a written response to Labour MP Baroness Hollis earlier this Summer, Lord McKenzie of Luton produced figures revealing people with less than 20 years until retirement in 2012 on salaries of up to £25,000 will see negligible benefits from personal accounts.
The figures show individuals in these categories would only see returns of between 1 and 3 per cent greater than if they did not save in the scheme.
The figures are calculated for workers who do not already have private pensions and who would be saving at the default rate.
If they are automatically signed up to a scheme that actually leaves them worse off then, as the Pensions Policy Institute’s Niki Cleal argues, there could be claims of “mis-opting” if not mis-selling. Even if this affects relatively few people the impact on consumer’s confidence in the scheme could be considerable.
At a fringe meeting across town, O’Brien’s fresh-faced colleague Secretary of State for Work and Pensions James Purnell was keen to avoid a “Heseltine moment” when he was grilled by the Independent’s Steve Richards.
Purnell claimed not to have a vocation to lead the country, which will come as some relief to Prime Minister Gordon Brown who has been defending his job from “novices” within the party’s ranks and outside. David Miliband employed an unusual tactic to deflect accusations that he’s a ruthless contender for the most serious job in Britain by getting snapped clutching a banana outside the conference centre. Or is it a sign he wants to be King of the swingers, the jungle VIP?
It will be interesting to see where Miliband and Purnell end up when Brown reshuffles the cabinet in the coming weeks. Will Purnell keep the pensions job or will the DWP’s ever-revolving door keep turning?
The Prime Minister’s speech seemed to go down well with delegates although, unsurprisingly, the political hacks in the press room were more cynical. They berated Brown for “sending his missus on first” and then groaned as the video montage of eulogies from popular figures like Sir Alan Sugar was played in a Big Brother-style “here are your best bits” show reel.
Yet Brown’s assurances that he was the “rock” the country needed to get through the economic crisis, were well-received and no one even mentioned the other “Rock” cast a heavy shadow over his first year in the job.
All was calm. And then the ground under the rock started to crumble away once again as news of Ruth Kelly’s resignation broke. The Tories must have been rubbing their hands with glee as Newsnight broadcast the story on the eve of Brown’s speech.
Ah well… next stop Birmingham and the Conservative conference to see what Chris Grayling and Nigel Waterson have to say about Money Marketing’s Time to Get Personal campaign.
So far the pair have maintained a tentative consensus on the pension reforms whilst still warning of the dangers of means testing. But, now the Labour party is so low in the polls, will “David Cameron’s attack dog” Grayling – as O’Brien affectionately calls him – finally seize the opportunity to sink his teeth in?