Labour’s response to the biggest announcement of the Budget, on pensions reform, was never going to be snappy. It would be unfair to expect an Opposition to deliver an immediate response to such a surprising and complex reform. But that’s not to say that the way the party has responded has been exemplary. They were not helped by John McTernan’s Newsnight interview on Wednesday night in which he framed the debate about the pension reforms as being about whether or not governments should trust people to manage their own money. He’s a former party adviser so he doesn’t get the lines to take (which, according to Adam Boulton, were not all that inspiring), but saying ‘you can’t trust people to spend their own money sensibly’ immediately made the debate about whether Labour has any faith in the voters it hopes will elect it into government next year, rather than the details of the policy. As James said yesterday, this is the sort of debate that George Osborne should relish.
Ed Balls distanced himself from those comments, and as Sam Coates reports in The Times, the party is prevaricating over its official policy on these pension reforms, but there was one thing that Balls said that betrayed something very interesting about the Labour mindset on personal finance and trusting people. He told the Today programme:
‘Will there be proper protections and proper financial education so people don’t make the wrong choices and end up running out of their pension pot well before their retirement ends?’
There is a good reason for a party not to trust people with their own money: if they haven’t been offered any education to understand complicated personal finance issues. Oddly, it was under Labour that this gap became quite clear, but it was not until the Coalition formed did personal finance make its way onto the national curriculum.