I have a problem with our new pensions minister, Ros Altmann. She might be too good at her job. For years Altmann has been a tireless campaigner for the over 50s, both as director general at Saga and, since last year, as the government’s “champion for older people”. But she did not just campaign, she was also strikingly successful at it.
Back in 2007 she lobbied the Labour government to compensate victims of company pension schemes that had gone bust – and won. As the financial crisis unfolded and the Conservative-Liberal coalition government took the axe to public spending, she insisted that winter fuel allowances, free eye tests, free bus passes and other benefits were a line in the sand for pensioners that the government should dare not cross. “Older voters may not riot in the streets, but they do vote and they don’t forget,” she warned in 2010. David Cameron took heed.
Around the same time, she called for a flat-rate state pension and the end of contracting-out. Ian Duncan Smith was evidently impressed. From next year a £155 a week flat rate state pension will be introduced, while contracting-out is indeed on its way out.
But the most extraordinary policy which she can be credited with is the end of annuities. In my email archive over the past decade are numerous calls from Altmann for the end of compulsory annuitisation, dating back to long before anybody else was seriously making the case.
The new freedoms that came into force in April are the most revolutionary changes to pensions in a generation, and Altmann was the trailblazer for reforms few ever expected to see (and which were deeply unpopular with the traditional pension companies). She even helped overturn a decision by the Payments Council to scrap cheque books.
She will perhaps, though, have a more testy relationship with the governor of the Bank of England, Mark Carney. Altmann, as much an economist as pension policy expert, was implacably opposed to quantitative easing, arguing that in driving down interest rates it was having disastrous side-effects on the incomes of millions of pensioners, and tipping company schemes into unsustainable deficits.
Pensioners can be relieved that in Altmann they have a minister who will be unrelenting in defending their interests. And therein lies my problem. Public spending is a zero-sum game.
The more that benefits for pensioners are ringfenced and made inviolable, the more must be cut elsewhere as the £12bn axes falls on welfare. It will likely fall on the poor, the young, the unemployed and the disabled rather than on pensioners, who as Altmann and Cameron know, enjoy far more political clout.
Yet it is wrong-headed to cast all pensioners as wealthy baby boomers who have grabbed everything while the young are permanently excluded. There are plenty of pensioners who have worked hard for every penny they have. There are plenty more struggling by on tiny incomes.
What we need is a Ros Altmann for people in their 20s, a “champion for younger workers”, to fight and defend as successfully as she has. The situation of many young people was tragi-comically highlighted this week by the landlord in London demanding £400 a month for a tenant to sleep on a single bed in the corner of a stranger’s kitchen. Who is defending their interests?
