A Libertarian Budget?

The Chancellor has won praise from the Right for his innovative approach to pensions. This at first glance confirms him as a libertarian and opens a wide divide between the Tories and Labour, which must be welcomed as the arguments shift from managerial to ideological. Surely Labour can win in a battle over fairness?

However, closer examination may lead to this analysis being questionable. If a libertarian approach aims to remove the State from having any role in people’s lives, his policy on annuities fails. It purports to enable those retiring to have full control over their own pension pot, without being told by the State what to do with it. Libertarian? Apparently.

But if we compare this to the Right’s reliance on markets’ self-control, it can be shown how, when this fails to be the case, as it often does, it is the State which has to step in to bail out failures, again and again: the banks being a case in point. So when (not if) people fail to foster their assets effectively for their retirement, where will their needs be met? By the State, of course.

The fallacy of the Right is that its ideology sounds attractive – let everyone hold onto their own money as far as possible - but that this has been shown not only to be a recipe for failure but to place greater reliance on the State than it would claim. It also favours the ruthless over the fair and is likely to lead to the most unequal society, as we have now. How Labour can support this flawed policy is perplexing and should be challenged.