Young...
Tell me about the Turner report and the furore caused by Brown's leaked letter - he sounded a bit like the Irish rugby forwards, getting their retaliation in first!

Hamilton...
Well, I haven't read it in detail, as it runs to many pages, but by and large it seems to me like good common sense - Turner's main recommendations are:

• Progressively raising the pensionable age to 67 by 2030 and possibly 68 by 2050 - very sensible given the fact that more and more people like us are living into a fine old age and need something to do with their time, so why not a bit of good old work? Hasn't done us any harm- don't know about you but I am inclined to do some work for a long time yet, as well as a bit of golf, fishing and keeping you out of trouble on your boat!
• Linking pension increases to wage inflation whilst significantly raising the amount of the State basic pension seems very sound - and will avoid another bout of long-term impoverishment of pensioners.
  I really cannot understand Brown's objections to this - he seems to be stubbornly attached to means testing and complex Pension Credits for poorer people which will act as a long-term disincentive to people saving for themselves when they can. His plans are very short-term in a long-term game.
• Setting up a National Pensions Savings Scheme to which employees are opted in unless they specifically request not to be is the best kind of common sense. The bleatings of employer's organisations that 3% contributions are going to ruin business sounds a bit like Victorian coal-owners complaining about the abolition of the Truck Acts. For God's sake! If employers can't afford to offer give their employees basic benefits, they should not be in business at all - especially as British-owned companies are generally so inefficient - why don't they concentrate on managing rather than moaning? The CBI has leapt up screaming 'Wolf' every time government has suggested doing anything for employees - remember the Minimum Wage?

As you know, I have no time at all for Brown. In my view, he kick-started the scandalous retreat from Defined Benefit pension plans by his ill-judged raid on tax relief on dividends. This provided an excuse for companies to react to a short-term glitch in stock markets and move straight from a lengthy period of taking 'holidays' on pension contributions to closing plans altogether. Brown's stealth tax on pensions indicated that he didn't take them seriously and companies used that and other events as an excuse to rush to closure. He was midwife to one of the most scandalous acts of corporate mis-behaviour in decades.
Now we have the disgrace of FTSE 100 companies paying out £39 billion in dividends but only £10.5 billion in pension contributions. (See Occupational pensions - now we know exactly where they're coming from.)

Young...
So Adair Turner has got it right?

Hamilton...
Pretty well - but there are a few really significant matters about which nobody, including Turner - who after all is deputy chairman of an investment bank, Merryl Lynch Europe - seems willing to speak out loud - matters that are equally as important as Turner's recommendations.

Young...
As important as that?

Hamilton...
You bet - now hear this!
For a start, there is the small matter of trust. I believe that the public at large has now been led up the garden path and let down by government so many times that there is a deep unwillingness to trust anything they are told. Turner is assuming that people will behave in what he would regard as a rational manner if they are given the chance. But why should they? What rational group of people which has been let down time and time again would engage in saving for their futures if they don't trust the 'System'.
If we go back in history, governments have introduced new pension provisions and broken implied promises time and time again.
Think of the State basic Pension, originally linked with earnings increases with average earnings. This link was broken by Margaret Thatcher's government, and replaced by the lower prices increases - much to the detriment of millions of people.
Then there was SERPS - State Earnings Related Pension Scheme, which it was fairly quickly concluded was unaffordable. Consequently, the SERPS formula was worsened to reduce the maximum payment - also the time to accrue the maximum payment was stretched from 20 to 30 years and the link with earnings was broken as well.

Before that there was a Graduated National Insurance scheme that enabled people's contributions to earn credits that rose in line with earnings. That scheme was scuppered - again by breaking the link with earnings increases.
So the idea that the State would reward people who worked hard and saved for their futures has been undermined time and time again.
One day someone will explain to us all what was done with the North Sea oil bonanza- surely oil is a national asset that could have been used to improve the lot of the populace, as in Norway. How can politicians tell us what we can't afford when they seem to have squandered national assets like oil and privatised utilities - to no apparent public benefit?
Now the latest signal from Brown is that saving for their futures will cause individuals to lose the means-tested Pensions Credit - so what incentive is there to save?

Young...
So you think that people don't trust government? Then what about the Financial Services industry? The behaviour of this industry over more than 20 years has been nothing short of a national scandal - starting with the Personal Pensions mis-selling swindle. Then as we have said before, many people- with direct government encouragement - were subjected to one of the biggest rip-offs in modern history - and the Financial Services industry has continued swindling people unabatedly ever since. Large parts of this industry appear to be rotten to the core, and the real problem is that the straight operators get tarred with the same brush as the crooks and incompetents.
The net result of all of this is that many people prefer to buy property or spend their cash now rather than entrust it to a deeply dodgy industry. This means that there is going to be a hell of a job to persuade people to save - especially as the self-same industry is also doing its level best to persuade them to get up to their necks in debt in order to have it all - now.

If the National Pensions Savings Scheme is set up - investments had better be entrusted to a safely underwritten national institution and not the Financial Services lot. That would be the equivalent of handing them a bonanza of people's savings, gift-wrapped. We should watch this space like hawks, more likely than not the politicians will hand peoples' well-being to the industry again - with the ever-present risk of another mass rip-off.

Hamilton...
There is then the small issue of employers' obligations towards their employees.
I would start with the question of what companies are there for in the first place. At a superficial level, it would seem that their major purpose is to enrich their managers, the investment industry and bankers- employees, who if I am not mistaken, create most of the value generated by companies - seem to occupy the hind teat when it comes to shelling out the rewards - except of course in the investment banking industry.

Young...
Exactly- it seems to me that we have forgotten that companies are part of Society and have a basic duty not to damage the public interest. Otherwise, what is their purpose? It can't surely be to fulfil some esoteric economic theory of market forces and unfettered competition?
So it seems to me that we have it basically arse about face - long- service employees should be at the front of the rewards queue, not at the very back.
The practical manifestation of that is that employers should have a duty to provide reasonable pay and benefits for stable employees - it should be regarded as a basic condition of being in business at all, not a bloody outrageous imposition.

Hamilton...
Well said! And if anybody raises the tired old argument that 'owners' should get the first cut, let me say that if the real owners - employees in pension funds, individual savers and insurance policy holders were asked if they wanted their pensions and savings given to an investment industry that wastes billions in speculation, bonuses, commissions and other forms of excess - whilst rewarding managers for often ruining their companies - they might surprise us all with their answers!

Young...
And finally...... Who speaks for the bulk of employees in the private sector?
We can state categorically that the superior pension provisions in the public sector are at least due in part to the fact that there are powerful Trades Unions to represent employees' interests - and there would have been crippling strikes of people who do actually provide us with valuable services - not simply useless pen-pushers as the right-wing would have us believe.
Many commentators - who purport I presume to speak on behalf of ordinary employees in the private sector - report that they are bitter about their colleagues in public service.
I wonder what the self-same pundits might think the answers would be if they asked private sector employees if they would like decent pensions, along the lines of those enjoyed by public servants?
It seems that we start with two basic premises - employees do not count as much as investors and industry has no duty to provide good benefits for its wealth-creators. I wonder what the situation might be if employees in the private sector were able to represent themselves as powerfully as those in public service?

Hamilton...
So there we are - very good questions that must be answered in the long run if we are not to avoid increasing alienation on the part of the working populace.
We have much to learn from Holland, Scandinavia and even poor old Germany when it comes to employee involvement, good benefits and high efficiency.
But I do believe Turner made a good start to addressing some really important questions that needed sorting.
I'll bet however that neither he nor the government will address our even more fundamental questions if they can help it - but sooner or later they will have to.
Enough of that for now - is there a cup of tea?