Robin Ellison says the one great advantage of the Brexit experience has been the inability of government to pass much new legislation affecting pensions
By the end of this month we will quite possibly be an ex-member of the European Union. But, with all the downsides of the protracted process, there has been one great advantage which has been slightly overlooked, namely the inability of government over the past two years to pass much new legislation affecting pensions. There simply hasn't been the bandwidth. ‘No government' can for a period be beneficial. Rather like, when doctors go on strike, fewer people die, lack of government can give a legislative holiday to a long-suffering population. Recent examples in Belgium, Northern Ireland, Germany, Spain, Italy and of course most recently the US, show that mostly life cracks on much as before.
There is an exception. Regulators rarely sleep or strike. And when they are awake they keep finding both new things to regulate and, in anticipation of that, more things to consult upon. During the phoney statutory peace that has been Brexit, TPR, FCA, HMRC, DWP, CMA and others have contributed to a plague of consultation about proposed new rules.
Of course, consultation is in principle a good thing, both for us, to push back on the more extreme excrescences of regulation, and for them, to avoid making foolish rules which they later regret. Sometimes consultation is formulaic (giving only a short time, usually over the Christmas break, rather like companies holding their AGMs on New Year's Eve in Stornoway). But often it is genuine, giving the rest of us the chance to make a worthwhile contribution.
One regulator alone, the FCA, has issued around 2000 pages of consultations and regulation in the last two years, while the rest of us have been agonising about the impact of WTO tariffs on electric cars and curved bananas. This is not the place to go into the minutiae of what they were consulting on. But it is the place to point out that the consultation emerges as a consequence of someone in a regulator finding another flaw in the system that needs fixing, or that they think needs fixing by the imposition of a new rule.
For road-users, the opportunistic fixing and repairing of potholes is no bad thing. But this hyperactivity in pensions reflects a profound lacuna in the training and thinking of regulators. What a relief it would be for the rest of us trying to do our day jobs if the massed ranks of regulators drafted a new pensions act every five years; in other words a joined-up group of lawmakers and rule-makers could produce a consolidated code of law and regulation. It is less the rules themselves than the incessant tinkering that causes us so much havoc and expense. And now that we have regulators competing for business it has become much worse.
It is time for our trade bodies to have a grown-up conversation with the regulators and say that there should be perhaps a single consolidated annual or a biennial period of consultation and that it should be contained in one document. It would calm the urge to produce ad hoc new rules, as the absurdity would be more evident, it would be easier to comprehend in context, and it might lead to less complication and lower costs. Given that it is public policy to consolidate pension schemes, to make life simpler, a similar policy should be applied to regulators to consolidate their reforms, changes or improvements. We could adopt an appropriate slogan for this new approach: ‘fewer, simpler, better' seems to have a contemporary resonance. Finally, a single reporting unit to supply information to the PPF, TPR, HMRC, DWP and FCA would avoid us all having to supply the same information in different boxes. It might operate rather like the pensions dashboard and, suitably redacted, be made publicly available. What's not to like? But as within the next 30 days Brexit will be history, chances are normal legislative business will be shortly resumed. And we might look back on the Brexit experience as an oddly golden era for pensions.
Robin Ellison is head of strategic development for pensions at Pinsent Masons
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