The Monday morning blog: the politics of pensions

The sight of Labour's aspiring potential Leader of the Opposition, the Lady Harriet, beating the drum for the confiscation of Fred The Shred's pension, is one of those classic moments of political spin. And whilst the unbelievably generous arrangements for this particular pension are staggering in the degree to whichthey have rewarded failure, the reality is that Labour are culpable in the arrangements.

Lord Myners, the City minister, has admitted he knew of the arrangement last October when Fred the Shred took early retirement from RBS. Myners defended himself by claiming he was not made aware that the decision was a discretionary one for the board of the company. This claim sits uncomfortably alongside Myners's previous role as a city financier. He is one of Labour's friends in the City, the sort of rich financier to whom Labour have sucked up for over a decade. If anyone knows how city boardrooms operate, Myners is the person.

Back to the Lady Harriet. As a leading member of the government, she shares responsibility for the pensions fiasco that includes making the benefit system vastly complicated with the result that too many pensioners do not claim their entitlement; taking away benefits from those who have saved and spinning that they are going to restore the state pension link to the increase in earnings whilst never actually introducing the reforms.

The reality of the situation is that Labour approved the pension deal for Fred the Shred and are now trying to wriggle free now that there has been a storm of public indignation about the arrangement. And the people making the loudest noise, such as Harriet Harman, will be the beneficiary of the most generous state pension going, the one set up for MPs and ministers. All this raises the interesting prospect of stripping failed ministers of their pensions. After all, we wouldn't want to reward failure, would we?

Equally nauseating is the babbling of George Pipsqueak Osborne. Having spent years defending financiers' rewards, and having seen his own leader last September, on the eve of the RBS pension decision, backing executive pay and conditions, we are now all expected to believe that the Conservatives want an end to such excesses.

Anyway, I'm off to London for two days. No National Express cancellations. Talking of failure, I wonder what their executive pension arrangements are liike.

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