Business, regulation and welfare politics in liberal capitalism

Abstract

Concerted support from business organisations for increased state welfare provision is unexpected in liberal capitalism, but in Britain this occurred prior to recent major reforms of pensions. Using Mares’ micro-theory of employer behaviour and studies of public/private mixes, this article shows that three umbrella organisations of employers and insurers supported higher state pensions because incremental state regulation of non-state provision over many decades and threats about even greater compulsion in the private sector had significantly reduced company control while increasing their costs. As a result, a higher state pension appeared more attractive to all business actors than further regulation of the private sphere. On this basis, we suggest that state regulation should be incorporated more firmly into theories of institutional development and interest formation in liberal regimes.

A State‐centred Explanation of the Finance‐Pension Nexus: New Zealand's Pension Reforms as a Typical Case

“…In addition, powerful financial companies and the influence of international organizations such as the IMF can be viewed as the two requisite scope conditions making the lobbying efforts of finance effective. That funded pensions are primarily the result of lobbying efforts of financial industry has been demonstrated by studies on Switzerland, the UK or the USA (Klein 2003;Leimgruber 2008;Meyer and Bridgen 2012).…”

The retrenchment of public pension provision in the liberal world of welfare during the age of austerity—and its unexpected reversal, 1980–2017

“…Gelepithis () explains moves towards more universalizing public pension schemes in the Anglo‐Saxon world during the last two decades as the result of an institutional mismatch between means testing and private savings. The former reduced savings incentives leading financial actors to convince right‐wing parties to reduce it in favour of public universalism (see also Meyer & Bridgen, ). She explains increased regulated non‐state provision (Gelepithis, ) as a product of increased trade union influence, notwithstanding labour's generally weak position in liberal systems.…”

“…Since the report of a special Pensions Commission, set up in 2002 by the Blair Government (Meyer & Bridgen, ), greater emphasis has been placed on the BSP rather than means testing. Thus, the earnings link for the BSP was re‐introduced from 2012 (Bridgen, ), a reform financed by transforming what was left of SERPS into a flat‐rate pension (which was later combined with the BSP) and increasing the state pension age.…”

“…This has occurred in the context of stagnant private personal pension coverage referred to above and, from the late 1990s, increasing structural pressures on occupational provision manifested most obviously in a general shift away from defined benefit to defined contribution provision (e.g., Bridgen & Meyer, ). In New Zealand (Ashton & St John, ), the United Kingdom (Meyer & Bridgen, ), and most recently Ireland (Reeve, ), reforms have been passed involving increased state regulation of non‐state provision including greater compulsion, using auto‐enrolment, and some form of employer mandate (Clark, ). In the United Kingdom, this has also involved the insertion of a “public option” (Benish, Haber, & Eliahou, ) into the private pensions market through the establishment of a quasi‐public pension trust (the National Employment Savings Trust) into which employees can chose to pay their contributions.…”

How European pension promises changed in austere times: 2002–15

“…In this situation a cross-class political consensus agreed that the existing system of a very low state pension and voluntary occupational benefits was no longer functional. A higher state pension and employer compulsion was the resulting compromise (Meyer and Bridgen 2012).…”