Best Of

This time will be different to the last time, part 100.

https://www.gov.uk/government/news/pension-reforms-to-go-further-to-unlock-billions-to-drive-growth-and-boost-working-peoples-pension-pots

Working people and businesses are set to benefit from new rules that will give more flexibility over how occupational defined benefit pension schemes are managed, as the government continues to remove blockages that are inhibiting its growth agenda that will improve lives of working people across the UK.

Hosting a meeting with leaders of Britain’s biggest businesses in the City of London today (Tuesday 28 January), the Prime Minister and the Chancellor will set out the details of changes and tell some of the country’s leading CEOs that Britain is back and open for business.

At the roundtable, the PM and Chancellor will outline how restrictions will be lifted on how well-funded, occupational defined benefit pension funds that are performing well will be able to invest their surplus funds.

The current rules heavily tilt defined benefit pensions towards investing in the safest possible financial instruments - effectively gilts or the highest quality corporate bonds.

This makes sense on at the individual fund level, but absolutely no sense whatsoever at the national level: Pension funds have the longest possible time horizons - they’re the ones who ought to be investing in national infrastructure & reaping the long term benefits.

There’s been a weird double-think in much of the UK for the last few decades, where much talk is made of “growth” but at the same time every part of the system has been constrained to allow as little economic growth as possible. For economic growth to happen somebody, somewhere has to do the actual work: houses have to be built, roads maintained, computer programs have to be written, and so on & on. Preventing pension funds from funding that work helps nobody.

(Economics types will recognise this as an example of the fallacy of composition that Keynes railed against.)

The rules were set up primarily, I think, to force pension funds into funding government borrowing. It's been an issue for decades; it's encouraging that desperation is finally forcing them to take look at them.
Desperate measures do carry a degree of extra risk though.

So what happens when that risk does not pay off ?

The members of the scheme get reduced benefits presumably.

Why should private defined schemes take that risk, especially when so many are now closed to new members and their age profile is far older than DC schemes.

As I said yesterday even by Rachel from accounts standards this is an unbelievably stupid idea. Does she really think that £160bn of surplus is sitting around doing nothing? Of course not. So where is it? Well, its invested in UK companies, foreign companies and gilts. So it is already a major source of our investment.

The real problem is that since Brown changed the rules on dividends for pension funds less and less of UK funds are invested in UK quoted companies. But that is a consequence of tax policies, not a consequence of surplus funds lying around. If this "surplus" is removed by the supporting employer they might invest it or they might pay dividends with it. Who can say, but another part of the growth problem is that pension funds have driven UK companies to be cash cows rather than investing for future growth so it is a fair bet that the latter will be the most common.

The issues are:
(1) that UK pension funds are reluctant to invest in FTSE companies (roughly 10% of their holdings at present).
(2) That unlike in the US UK funds seem more interested in dividends and squeezing cash out of companies than capital growth.
(3) That this makes it more difficult than is ideal for startups and small companies to access capital in the UK.

None of these problems are addressed by Reeves' proposals. Indeed some of them may become worse.

Can I please challenge you on this "Rachel from accounts" thing. It is open and petty misogyny - you would not have referred to "Kwazi from Accounts" or "Rishi from Accounts" or "Gordon from Accounts"

She is the Chancellor of the Exchequer and she's a woman. Feel free to consider that she is doing a poor job - that's fair. But "Rachel from accounts" is attacking her for her crime of being a woman. Please stop. You are better than than even if so many Tories and right wing commentators are not.

If she wasn't stupid people wouldn't think she was stupid and so they wouldn't call her Rachel From Accounts. In fact the name exaggerates her abilities. If she doe have any qualifications in Economics, or A Level Sums that says more about the institution that gave her that qualififcation than it does about her.

But whilst no-one doubts Starmer is the worst Prime Minister ever, Rachel has stiffer competition. There is a very amusing come snide section of Dick Crossman's diaries where he discusses the abilities of the then Chancellor Jim Callaghan. Of course the whole of those diaries are focussed on pointing out he would have been so much better a PM than Wilson. Which he probably would have been. I doubt there are many Diary writers in the present cabinet, just another minimum entry requirement for their jobs which they don't have.

PPE at the University of Oxford and a Master's degree in Economics from the London School of Economics.

To be fair, I learnt to put my covid facemask properly on with a 1 minute youtube video, why it takes some 3 years study at Oxford heaven only knows.

Labour are shit, volume XXIII...

"Is Keir Starmer a worse Prime Minister than Liz Truss?", Richard J Murphy, 7mins
https://www.youtube.com/watch?v=rJBCfPWkIbA&list=UUGlMOIZ1A3zluwLXTGpzZfw&index=3

"...Reeves is actually working against the best interests of the people of this country and in favour of the hierarchy of wealth. That isn't what Labour should be doing!...and if Labour does deliver austerity in March as (I expect) then I have little doubt at all that she will become worse than Liz Truss, because she actually is going to deliver what Liz Truss fail to do: an economy totally biased to the interests of wealth.

How did we get to a point where Labour is so corrupted, has so lost touch with its core values, is so out of touch with the people of this country who put it into office?...positively working against the best interests of most people in this country? I wish I knew the answer to that question. I can only put it down to corruption: political corruption, intellectual corruption, and plain straightforward alignment of the personal interests of those who are in office with those who have wealth..."

If Richard Murphy thinks something you can pretty much guarantee the opposite is true. The Alex Jones of accountancy. He's a well known crank who for years (he first emerged under the coalition) has basically been saying "there are hundreds of billions of pounds we could tax now but I am the only person to have realised this".

"We are already clobbered enough on council tax" says Isabel Oakeshott questioning the number of times rubbish is collected.


https://x.com/TalkTV/status/1883822499151872462

Narrator: Isabel posted an article yesterday on Telegraph saying she has been living in Dubai since...erm. August 2024

https://www.telegraph.co.uk/news/2025/01/25/how-i-became-a-labour-school-fee-exile-in-dubai/

Our main bin collection has been once a month for several years and our council tax has risen by 10.1% in 23, 9.67% in 24 and expected 10% this year

Welcome to North Wales

Possibly because the funding from central government is not keeping pace, hence the increase in the poll tax amount. It's not difficult.

They are inefficient and as they have no competition they have no reason to actually fix the issues, they can just milk the public by keeping charging higher and higher amounts. Just grifters.

It's all going on social care Malcolm, after years of council tax freezes and real terms cuts to general grant. You can moan about the Scottish Government and the NHS all you want - councils really deserve a pass IMO.

"We are already clobbered enough on council tax" says Isabel Oakeshott questioning the number of times rubbish is collected.


https://x.com/TalkTV/status/1883822499151872462

Narrator: Isabel posted an article yesterday on Telegraph saying she has been living in Dubai since...erm. August 2024

https://www.telegraph.co.uk/news/2025/01/25/how-i-became-a-labour-school-fee-exile-in-dubai/

Our main bin collection has been once a month for several years and our council tax has risen by 10.1% in 23, 9.67% in 24 and expected 10% this year

Welcome to North Wales

Possibly because the funding from central government is not keeping pace, hence the increase in the poll tax amount. It's not difficult.

The current solution to social care funding is for local councils to not do anything nice at all.

(Our local library has just been announced as for the chop. For all it is small, part-time and close to bigger alternatives, it's a very visible enshittification of the neighbourhood.

And the council will still be unviable.)

I personally think that social care and education should be removed from councils anyway. The NHS should have an overarching responsibility for care, and the schools should be funded from central government as well. It would give us a better idea of what our tax rate is really. Councils should deal with the rest.

Out of impure curiosity, how do the two authors categorize themselves, politically?

The authors declare no conflicts of interest. Beyond that, in research, we let the methods speak for themselves. There’s an additional online appendix at https://journals.sagepub.com/doi/suppl/10.1177/19401612241311886/suppl_file/sj-docx-1-hij-10.1177_19401612241311886.docx

The methods are peculiar to say the least. Because of the huge amount of data, they simply award an aggregrated 'fact' score to each news source, and social media posts that link to those sources score low, and are therefore classified as misinformation without actually being read. That isn't anybody 'lying' - the stories sitting on these 'low fact' websites could have been utterly true, such as 'Covid probably came from a lab' and 'Lockdown could cause untold harm', whilst other stories on 'high fact' websites could have stated that 'Lab leak is a racist conspiracy theory' and 'We must lock down harder'. The latter is misinformation, the former is not, but this process wouldn't have picked that up.

The whole conversation on 'misinformation' is absurdly circular. The two pillars of the prevailing global consensus (until now) have been the failure of capitalism, and the climate crisis. These are both themes well supported by the political left, so of course judged by that yardstick, they will present fewer 'low information' arguments and sources. Sources standing up for personal freedom against the state, lockdown scepticism, climate crisis scepticism and other right wing causes, are damned by definition. We may just as well say 'right wing people present unacceptable right wing thoughts.'.

I have no doubt that this is a study where “least truthful” coincides with “least in agreement with the authors.”

Out of impure curiosity, how do the two authors categorize themselves, politically?

The authors declare no conflicts of interest. Beyond that, in research, we let the methods speak for themselves. There’s an additional online appendix at https://journals.sagepub.com/doi/suppl/10.1177/19401612241311886/suppl_file/sj-docx-1-hij-10.1177_19401612241311886.docx

The methods are peculiar to say the least. Because of the huge amount of data, they simply award an aggregrated 'fact' score to each news source, and social media posts that link to those sources score low, and are therefore classified as misinformation without actually being read. That isn't anybody 'lying' - the stories sitting on these 'low fact' websites could have been utterly true, such as 'Covid probably came from a lab' and 'Lockdown could cause untold harm', whilst other stories on 'high fact' websites could have stated that 'Lab leak is a racist conspiracy theory' and 'We must lock down harder'. The latter is misinformation, the former is not, but this process wouldn't have picked that up.

The whole conversation on 'misinformation' is absurdly circular. The two pillars of the prevailing global consensus (until now) have been the failure of capitalism, and the climate crisis. These are both themes well supported by the political left, so of course judged by that yardstick, they will present fewer 'low information' arguments and sources. Sources standing up for personal freedom against the state, lockdown scepticism, climate crisis scepticism and other right wing causes, are damned by definition. We may just as well say 'right wing people present unacceptable right wing thoughts.'.