Scheme 'serfdom' attacked by MP
In a background paper for a Fabian Society conference on the future of the welfare state, to be held next month, Mr Field proposes radical change to pensions as part of a reform of welfare provision.
Mr Field says that the growth of occupational schemes had been one of the least-sung successes of industrialism. 'Almost 16 million people are now in schemes with pension funds whose portfolios account for a staggering 30 per cent of all shares in this country. It has consequently been estimated that the top 50 pension fund managers have effective control of UK industry through the capital base our occupational pension funds own.'
But members of such schemes have no control over them. 'Pension reform should aim at nothing less than the abolition of that pension serfdom whereby people's capital assets are not owned by them,' Mr Field says.
He urges a shift from schemes based on pensions related to between one half and two-thirds of final salary, to money purchase schemes, which pay a lump sum or annuity when they mature - which would allow members to wrest control from the 'medieval barons' who currently ran them.
Mr Field says that too much of their approach is based on short- termism, assisting predatory takeovers, and that if the workforce controlled its pension fund assets, 'the emphasis will be much more like that in Japan, with the taking of a 20-year-or- more view of the likely growth in the value of pension assets and the income which will be derived from it . . .The need is to take welfare out of the ghetto and place it firmly as part of the debate on Britain's economic and industrial future . . . Sticking plaster policies won't do. An increasing proportion of the electorate see Labour as a backward-looking party and one intent on holding them down.'
Mr Field, Labour MP for Birkenhead, says: 'The intellectual challenge of how to achieve full employment is greater today than that of the 1930s. It will require a degree of intellectual and political commitment which has yet to be demonstrated on the contemporary British scene.'
He adds: 'The growth of the welfare budget is not a criteria to measure success. An expanding welfare system is a failing welfare system . . . because it means people are being dragged down and snared in the safety net.'
Making Labour into the Party of Work, Wealth and Opportunity; Fabian Society; 11 Dartmouth Street, London SW1H 9BN; pounds 1 inc p&p.
Leading article, page 16
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