This pensions tangled Webb should never have existed

IT seemed such a marvellous idea. Allow older pensioners forced to buy low-returning annuities to flog them and invest the proceeds how they liked: Ferraris, cruises, the choice is yours.

Then-pensions minister Steve Webb was the man with the plan. He’d already ended the rules forcing those coming up to retirement to buy the cursed things. It’s unfair, he reasoned, that those already retired shouldn’t be allowed to join the fun. Consumer champions cheered him along.

But it was the Treasury which drove the programme hardest, slavering at the thought of all the early tax revenue they’d receive as the oldsters rushed to cash in.

Trouble was, no one thought to ask the people expected to buy all these annuities — the insurance companies. If they had, they’d have discovered a sceptical audience.

For a start, in these markets, insurers would only be able to offer low prices. “Rip-off of the elderly” headlines beckoned.

More importantly, they’d have asked: who is going to police this market? The potential for cowboys to mis-sell to vulnerable folk in their seventies and eighties was huge, and savvy terrorists and criminals would see buying annuities as an excellent way to launder money.

A huge, costly regulatory structure would be needed to deal with these issues before any reputable firm would even think of jumping in. All for the sake of a small market which — unless they come up with a cure for mortality — won’t be around for long anyway.

Pensioners will today feel let down that the scheme has been scrapped. They should never have been strung along in the first place. LLOYDS shares today languish at a pitiful 54p a share, way down on the 73.6p price we taxpayers paid for them during the 2008 bailout. Or, come to think of it, the 70p-80p they traded at before the Brexit referendum.

But for all that, the Government is right to resume selling its remaining 9% stake, a process that begins any day now.

With interest rates at record lows, there’s little chance of a major recovery soon, barring the discovery of pots of gold behind the sofas at its Gresham Street HQ. So why keep state money tied up in an investment going nowhere at a company that wants to be freed from the Government’s hand?

Besides, when you crunch the maths on the share price, exiting now doesn’t look quite so awful. For, if you consider dividends and other paybacks we’ve had from our stake, 54p is the exact price at which we break even.

But what a pity we stopped selling our shares to institutions earlier in the year when they were fetching an average of 79p.

The process was halted solely so George Osborne could stage a votegrabbing sale of the remainder to retail investors; a sale that has now been scrapped.

Will anyone be held to account for such blunders? Take a guess. @ArmitageJim