Today's Observer

A few interesting bits in the business section. This piece about a private members bill seeking to ensure that private equity takeovers are covered by TUPE. Still on private equity, Richard Wachman has a pop at Guy Hands' increasingly wobbly looking ownership of EMI.

There's a good old rant from Simon Caulkin here about non-doms. I like this bit:

as Martin Wolf has powerfully argued in the FT, the financial sector is an industry 'that generates vast rewards for insiders and repeated crises for hundreds of millions of innocent bystanders' who, to add insult to injury, then are obliged to pick up the pieces with their taxes. In the terser formulation of playwright Bertolt Brecht: 'Every 10 years a great man. Who paid the bill?'

We did. And it is at this point that the non-dom issue swims murkily into the picture. Of course, there are non-domiciled, low-tax-paying UK residents of all trades, shapes and sizes - ship owners and business-school lecturers along with City traders and bankers. But be sure that most of the irritating high-pitched drone you've been hearing these last few weeks comes not, as you might have imagined, from the famous 'mosquito' device for dispelling rowdy teenagers in our town centres but, just as repellent, from high-earners in the City whingeing about the preposterous idea of having to pay tax on all their earnings.

Finally there's this piece about a Policy Exchange report on pensions. I've had a look on their website and can't see any sign of it, so presumably it's a trail for next week. This line looks a bit odd:

He also predicts that there will have to be changes to public sector schemes, whose cost is expected to rise by a third to 2 per cent of total GDP by 2030. These schemes are still final salary-based and offer benefits on average four times as generous as those given to private sector employees.

There are all kinds of types of level of pension provision in the private sector ranging from nothing at all, to final salary schemes that are better than those in the public sector. I don't see how it is possible to say public sector schemes are four times as generous. But more evidence that public sector pensions are going to come under attack from the Right if they get back in power.

This line is more interesting from a geeky point of view:

The report says that companies should be allowed to shift more of the risk of providing pensions on to employees.

This is really what it is all about in my view. Companies want stable costs if possible, hence the shift to DC where they know what the cost will be. But unfortunately, just as stable (ie defined) benefits mean volatile costs, so stable (defined) costs (contributions) are going to mean volatile benefits. Some will do ok out of DC, some will do very badly. It will be just a matter of luck depending on market performance, annuity rates etc.

Much as I try to be a realist about policy, I can't square this one. I can't accept that the over-riding aim in pension policy is to ensure that companies have a flat line on their balance sheet. It must be a consideration, and as such risk-sharing, rather than total transfer of risk onto individuals is maybe a realistic compromise in the future. But at present the employers in the private sector have the whip and they have decided by choosing to go DC that they aren't going to shoulder any risk in future. I can't see it as anything other than a big loss.