Maybe. In 1971, Keith Joseph issued a White Paper proposing a new state pension scheme with its contributions placed in the investment markets. Frank Redington commented: The aim of funding is admirable; it is to make real investments to underpin promises which have to be honoured later. However, it is an illusion to believe that a compulsory increase in savings creates more investment. It does not. Industrialists build factories because people are spending, not because they are saving.
Later, in 1977, he said: Nowadays we realize that the scheme would have been a disaster and I still tremble to think that we were saved only by the accident that the Conservatives lost the 1974 election by a whisker.
Redington was one of the leading actuaries of this century. His full arguments are subtler, requiring more space than a Letters page. I commend them to your readers, and to Lord Joseph in particular.
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