Great hope of British pensions
It’s very difficult to find anybody to say a bad thing about Adair Turner. The former head of the industry group the Confederation of British Industry, who now heads the UK’s Pension Commission, has a lot of fans.
Turner has a blue-chip background in public policy, academia and the financial markets and business. As well as being chairman of the Pensions Commission, he has a similar role at the Low Pay Commission. He’s visiting professor at both the London School of Economics and Cass Business School. Not only that, he’s an author as well, of ‘Just Capital – The Liberal Economy’. And as if that wasn’t enough, he’s also vice-chairman of Merrill Lynch Europe.
So in many ways Turner is the ideal person to deal with the Gordian knot that is pensions in the UK. By all accounts he knows his stuff – but he also has the management, presentational and political skills that such a task demands.
The commission’s initial 346-page opus ‘Pensions: Challenges and choices’ was released to widespread acclaim in October 2004. The government, opposition, pensions professionals and the unions were generally behind Turner and his colleagues’ work.
But some commentators said the report was too narrow in its definition of saving. It’s worth noting that Turner has responded to such criticisms, stating that the commission is working on a paper looking at the wider saving environment.
The full report – which will contain policy recommendations – is planned for autumn 2005, well after the expected general election. The government set up the independent Pensions Commission in December 2002 and Turner was a shoe-in as chairman. Typically, he put together a detailed nine-page workplan for how the commission would proceed.
Despite being appointed by the government, he’s not seen as a stooge of the political establishment or the business lobby.
Turner has been involved in politics – but that was a very long time ago, when he was chairman of the Cambridge University Conservative Association in 1977. He joined the ill-fated Social Democratic Party in 1981 but has declined to be a member of any political party since the mid 1980s.
He joined British Petroleum in 1979 before moving to Chase Manhattan and then to management consultant McKinsey & Co.
When he was at the CBI - from 1995 to 1999 - he was credited as having steered a course between government and unions in the wake of the major reforms undertaking by the Thatcher government. Indeed, a 1999 survey of the most powerful people in the UK put him at number 93, just behind the Pope.
He’s a self-confessed economic liberal who appears genuinely to relish the intellectual challenge he has set himself. He is able to deploy weapons-grade economic arguments but is receptive to the “experts in the room” at speaking engagements. He admits to using his lectures as a way of helping to clarify his thoughts
John Cridland, the current deputy director at the CBI, knows Turner well. Cridland not only worked for him at the CBI but with him more recently at the Low Pay Commission. “He’s a very very bright individual,” Cridland says of his colleague. “He’s got a very incisive view of the issues involved.” Cridland admires the way Turner “gets to conclusions a lot quicker than most other people in the room”.
Turner’s great skill is that he also knows how to “bring people along” with his persuasive abilities, says Cridland. He also points out that Turner’s tenure at the CBI coincided with a difficult time for industrial relations in the UK, which he helped to ease by forging a stronger working relationship with the new Labour government. But Turner is avowedly “not a party political animal”, Cridland says. “I think he’s changed the landscape.”
Ros Altmann, governor of the London School of Economics where Turner is a visiting professor, says: “Adair Turner has, in my view, conducted himself with enormously impressive political astuteness.
“His initial report from the Pensions Commission neatly side-stepped the political minefield of pointing out the dangers of the government’s mass means-testing policy and claimed that there is a ‘muddle through’ option for pensions, which could allow us to go on as we are.
“In addition to this political skill Adair has also demonstrated academic rigour, with brilliantly presented analyses.”
Altmann praises his impressive organisational abilities and his ability to set himself strict guidelines. “He is also keen to build up his overseas image.”
Another pensions person who has a lot of time for Turner is David Blake, Professor of Pension Economics and director of the Pensions Institute at Cass – where Turner become a visiting professor in 2004. “I think he’s really good at simplifying complex problems,” Blake observes. “The Pension Commission report brings that out clearly.” He rates Turner’s ability to synthesise ideas, which he puts down to Turner’s background in academia.
Blake likens Turner to Howard Davies, another of the ‘great and the good’ in British public life. Davies has had various senior roles in business, regulation and academia. “In a sense you can compare him with Howard Davies, who has had a similar role in public and who, like Turner, is an alumni of McKinsey.”
Blake also approves of Turner’s ‘hands-on’ approach, as exemplified by the fact that Turner is understood to have drafted much of the Pension Commission report himself – and didn’t leave it to government bureaucrats. Indeed there may be a question about how much his two fellow commissioners, Jeannie Drake and John Hills, contributed to the drafting.
Drake is a union official and a non-executive director of the Pension Protection Fund, while Hills is Professor of Social Policy at the London School of Economics. Their names are, understandably, not as widely known – indeed, it is very much the ‘Turner’ report and he is the commission’s pubic face. He frequently gives lectures and seems to be very keen to be out ‘on the circuit’ promoting the commission’s findings and building consensus.
“My understanding is that this is not someone who is just briefed in the taxi on the way over,” Blake says. “He’s very good at cutting to the chase.”
Blake said the fact that aspects of the report have been criticised as being ‘obvious’ should actually be taken as a compliment because Turner had the skill to realise that he needed to build consensus. Indeed, when the report was first released, pensions minister Alan Johnson was clear that it was an “initial baseline report”.
Turner’s background in economics is up to date and his report contains challenges to the economic theories about super-rational agents. When he turns up the economic heat during one of his clear and understandable presentations, he can appear very formidable indeed.
The Pensions Institute’s Blake says Turner’s apolitical approach is another part of his appeal. “He’s not placed as a party man. There aren’t many people in this country like that.”