The Government has been accused of hypocrisy and of making a U-turn over its pre-election stance in support of polarisation.
The allegations surfaced after Alistair Darling, then Shadow Treasury chief secretary and now Social Security Secretary, appeared on a financial services video in 1996 saying if polarisation was not broke, why fix it.
He also declares Labour's commitment to polarisation and claims independent financial advice is essential.
Darling says: “We do not propose to change it [polarisation]. We strongly believe if something is working and is not broken then you should not attempt to fix it. I think independent financial advice is absolutely essential.”
The Government is now moving to abolish the regime.
In the pre-election interview, Darling says people should have the choice to go direct but independent financial advice is crucial as IFAs have “no particular axe to grind”. He adds that people should have the opportunity to get independent adv ice wherever they live.
He says he wanted to avoid smaller IFAs being driven out of business and ensure the regulatory burden was eased to help them.
WMC Investment Man agers principal Wai Man Cheung says: “This just goes to show what a hypocritical Government we have.”
Aifa director general Paul Smee says: “His analysis is exa ctly in line with everything we have been saying for the last year. His comments were emphatically in support of polarisation so why do ministers now think he had got it wrong? The Government owes it to the sector to explain why the changes have been made.”
Conservative financial services spokesman Howard Flight says: “Stakeholder pensions are responsible for driving the undermining of polarisation. The biggest irony is that the U-turn is being driven by the area that Darling is responsible for.”
A Treasury spokesman says: “Darling's comments were made four years ago and in this time pension misselling has led to a lack of consumer confidence and the industry is tackling this through changes in prod-uct design and delivery.”