Yesterday the spotlight shone on the true mind set of this politician when he proclaimed the British public cannot be trusted to make the “reasonable and sensible” choice in a European referendum.
“Nanny knows best” has been the holy grail followed by all governments and civil servants across the whole of Europe, with the magnificent exception of Thatcher, since anyone of us has been old enough to vote. Ronald Regan’s famous line that the nine most terrifying words in the English language is “I’m from the government and I’m here to help” has been forever ignored… until 6 April 2015 that is. Step forward the unlikely hero of the outgoing coalition, Steve Webb.
Tuesday this week will forever be known as Pensions Freedom Day. In an extraordinary act of bravery Webb, the pensions minister, persuaded his coalition colleagues to engage in truly revolutionary thought that nanny doesn’t know best and that yes the electorate should be allowed to decide what to do with their pension savings. As sure as the cock crows, this sparked off a cacophony of articles and comment proclaiming such an act to be grossly irresponsible.
A gentleman called Hugh Pemberton, writing in the Financial Times admirably summed up the case against Webb’s revolution when he wrote “betting on your ability to manage your savings so you never run out of income is exceptionally risky”. Sadly but typically, like our financial regulator who has remorselessly driven our pensions industry deeper into debt instruments, he has forgotten the virtues of making your own equity investments. For history tells the retiree that over the 20 or so years of his life expectancy FTSE 350 companies pay a rising dividend income stream and, unlike a worthless annuity on death, his estate receives the benefit of that equity investment.
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Perhaps the new Pensions Wise Guidance Service will see fit to point this out to anyone who feels a little overwhelmed by this unexpected new freedom. Indeed they could do a lot worse than read Andrew McNally’s just published book, “Debtonator”. McNally advances a compelling argument for long lasting wealth creation through the use of equity as compared to the essentially nihilistic nature of debt. He uses some wonderful illustrations of how debt has got totally out of hand. I particularly liked his point that if you laid all of the world’s debt in dollar bills form end to end it would stretch from Earth to Mars and back 50 times!
Thankfully Webb aided by George Osborne, are not alone in turning the tide against “The Blair B*tch Project” as someone described Blair’s speech to me yesterday. For example, others in the Treasury and elsewhere have so far been successful in preventing the FCA from strangling at birth the democratisation of investment through crowdfunding. Unceasing vigilance will be required here but the signs are at least promising.
In the USA Senator Rand Paul, the author of “Government Bullies”, who is a big proponent of reducing the role of government in people’s lives, has just announced his candidature for the Republican nomination for the Presidency.
Despite the efforts of that most unholy of alliances, Blair, Miliband and Sturgeon, the political wind is beginning to blow in favour of giving us the freedom of making more choices in our lives. Fingers crossed 7 May will help that along.
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