Pensions Talks Interview: Gareth Jones

This month, our very own Gareth Jones, policy and regulation expert, shared reflections on the evolving political landscape following the Party Conferences - from shifting party dynamics and underrepresented themes to the implications for pensions policy and corporate engagement.

1. Following last month’s Party Conferences, what were your key takeaways? What issues or themes did you feel were underrepresented?

Conference season showed that the battlelines between the parties are starting to harden. Labour is leaning into the idea that the next election will be a choice between it and Reform UK, attempting to sideline the Conservatives and to reduce the flow of voters to its left, particularly the Greens. The Labour leadership wants to focus more on how it can tweak regulations to unlock economic growth and link that explicitly to protecting public services. The Conservatives are and positioning themselves as more fiscally responsible and pro-enterprise than other parties. And Reform UK is taking seriously the prospect that it might sweep both traditional parties aside completely and is starting to develop more detailed policy platforms through more intensive business engagement.

There were fewer headline policy announcements across conference season, though the Conservatives had the biggest economic commitment in its promise to abolish stamp duty on primary homes and confirmed their long-trailed intention to leave the ECHR. Labour conference was relatively thin on specifics, beyond the ditching of the Blair-era target for 50% of young people to attend university in favour of boosting apprenticeships. And Reform UK deliberately chose not to use its keynote speeches to unveil much policy, but instead to make its momentum in the polls the story and point to how it intends to develop policy in the future.

On pensions specifically, Torsten Bell was particularly active at fringe events at Labour Conference, both in his role as pensions minister and his role in advising chancellor Rachel Reeves on the upcoming Budget.

His focus very much was centred on the reforms contained in the Pension Schemes Bill, currently passing through its legislative stages in Parliament and addressing the longer-term issues of pensions adequacy, through the establishment of the Pensions Commission. Of course, the act of establishing a Commission that doesn’t report until 2027 meant that he could delay any tough decisions around the role of private and state pension (such as the future of the triple lock) and fend off tricky questions he received at panel events.

The other key area of focus was on potential tax changes to the pensions system with the upcoming Budget. Torsten Bell was noticeably evasive on questions he received about the future of the tax-free lump sum.

2. With Reform UK gaining traction, how do you see their influence shaping pensions policy in the future?

Reform UK has taken a starkly interventionist approach to trying to shift policy and investment decisions now, years before it could ever actually enter government. On net zero and infrastructure, it has explicitly warned renewables companies that it will tear up contracts for the coming allocation round of Contracts for Difference (AR7) and has warned infrastructure firms that they should “not bother” bidding to construct Northern Powerhouse Rail. Reform’s leadership has also been actively lobbying the Governor of the Bank of England over interest payments arising from quantitative easing and over stablecoin policy.

On pensions specifically, deputy Leader Richard Tice has been particularly critical of those schemes within the Local Government Pension Scheme (LGPS). He called for the LGPS to reduce the “egregious” fees it pays fund managers by moving assets into low-cost global equity index and bond trackers. The party had done its own analysis of LGPS performance and claimed it had underperformed by an average of 1.9 per cent a year since 2019. Tice also accused of LGPS and individual funds of "investing in woke things" – reiterating his anti-renewable energy and anti-net zero stance.

In recent weeks, Tice has appeared to have gone further and questioned whether much of the public sector can still afford DB pensions.  These could pose some serious questions for the wider pensions sector. As the Party takes control of local government, it will likely use its influence to involve itself in these issues and reiterate its ideological position. The politicisation of pension fund investment approaches could also extend beyond local government and become a key factor for the wider pensions and asset management sectors.

Taken together, it is clear that investment decisions will increasingly be made with significant focus on whether the policy landscape in any particular area maintains cross-party political consensus or if it is exposed to political risk under a Reform UK-led government, meaning that early engagement to understand and influence the party’s position will becoming an increasingly important part of businesses’ corporate affairs strategies.