The Mansion House reforms should not be ‘overclaimed’ as they can’t restore the fundamental changes needed in the economy, Labour life peer Baroness Jeannie Drake has said.

Speaking at the Association of British Insurers (ABI) Annual Conference on Tuesday 27 February, Baroness Drake said the principle of aligning the interests of pension savers with the growth of the economy and moving to net zero is a good one.

“The issue is how you achieve that, what is the governance structure in achieving that and how are the different interests reconciled.” Baroness Drake added that there is no foundation for private assets and there has to be a consensus to move forward on delivering on those proposals.

“Don’t overclaim for Mansion House, it can achieve a lot with other policy initiatives in delivering changes to investment behaviour but it can’t deliver some of the fundamental changes that are needed in our economy to make it successful, let alone restore international confidence. You do need a much greater focus on the governance of decision-making in this country on economic policy,” she said.

On UK pension policy she praised policies such as auto-enrolment, which its “potential is by no means exhausted” and welcomed developments in the consolidation of DC schemes. She also said the Pension Protection Fund (PPF) is a “great success” and can act as a good consolidator in the future.

However, she warned that the UK has “lost coherence and consensus” around creating pension policy that has good strategic outcomes for the public.

“I think when you’re backing pension policy with £50bn worth of tax relief then you need clarity on what you’re trying to achieve and whether you are on track to achieving that. I think we have lost that and we need to focus; there is a lot of activity on pension policy but in terms of public good there are some big issues, such as consolidation and value, small pots, the inefficiencies in the decumulation retirement, the pre-planning for increasing contributions.”

She continued: “I do worry that we have asymmetry of consultations at the moment and a lot of the consultations are between the providers and the government. I worry that the issue of the employee/employer in the future development of pensions could be neglected.”

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