Reeves must heed Aviva boss’ warning over pensions tax cuts, says MAGGIE PAGANO

Amanda Blanc is a tough cookie. Since sinking her teeth into Aviva four years ago, she has cleaned up the business, cut jobs and given the insurer a new purpose.

It worked: Aviva is the country’s largest pension and insurance company, with 19 million customers and assets of more than £300 billion.

It is number one in company pensions, with 4.9 million Britons holding more than one policy. Its shares have also risen by almost a third.

Blanc is also a major player in the business world: she is a non-executive director of BP and was recently asked by the Chancellor to advise on a £7bn national prosperity fund.

That she is no wallflower was evident from the brutal resignation letter Blanc wrote last year when she stepped down as chair of the Welsh Professional Rugby Board after accusing members of misogyny.

And she is a Dame. Which makes Blanc’s final warning to Rachel Reeves that the government should stay well away from fiddling with pension tax cuts all the more compelling.

And spot on. Speaking after reporting stellar half-year results, Blanc was responding to rumours that Reeves was considering changing pension cuts to plug a “£22bn black hole”.

Currently, basic rate taxpayers receive a 20 percent tax reduction on pension contributions, while higher rate taxpayers receive 40 percent and supplementary rate taxpayers can claim 45 percent.

Consideration is being given to switching to a flat rate of 30 percent, which would disadvantage people with higher incomes.

Blanc rightly warns the government to think carefully, because pensions are a long-term issue.

Everything Reeves does today will have consequences five, 10, 15, 20 years from now, she warns.

Blanc will no doubt have in mind Gordon Brown’s famous attack on dividends paid to pension funds, which were causing pensioners to lose income.

Pensioners may have lost up to £250bn, while the knock-on effect was pension funds pulling out of UK stock purchases. Such political, gimmicky policy changes have dangerous unintended consequences.

Blanc could have gone further and reminded Reeves that pensions are not just about savings, they are about deferred income and certainly not a honeypot for desperate politicians to plunder.

We can only hope that when Blanc meets Reeves to discuss the new endowment fund, she will emphasise the damage the change to pension arrangements, including the tax-free lump sum, will have on future retirement income.

Reeves has made a big advocate of having top executives like Blanc on his side.

It would be very rude of her not to listen attentively to what experts like her have to say.

The Unipart way

Nearly 11 years ago I stood in the pouring rain outside the old British Leyland headquarters on the bleak Cowley industrial estate near Oxford, waiting to interview John Neill.

All I knew about Neill was that he had joined the company after graduating in business administration, that he had led the acquisition of Unipart in 1987, that he was a maverick, that he had studied Japanese Lean techniques at Honda to improve manufacturing processes and that he had devised the ‘Unipart Way’ of doing business.

With a turnover of £1bn, the car parts manufacturer was employee-owned and booming. All in all, it sounded intriguing. And it was.

Furthermore, Neill is one of the UK’s largest industrialists, even though most people have never heard of him.

One of the many fascinating topics we discussed was how he intended to apply his industrial techniques to reforming the NHS, which he saw as obsessed with top-down rather than bottom-up goals.

He simply called it stupid, because 95 percent of what is done does not add value to the customer – and that is true for most organizations.

This is what he said: ‘I’ll be honest with you, and this is going to anger a lot of people in healthcare, but if our factories were running with the same number of defects as an average hospital, we would be out of business within 24 hours.

“And we would go bankrupt if we only ran the factories five days a week, as many hospitals do.”

Now, after 50 years at Unipart, the 77-year-old legend is retiring.

Health Minister Wes Streeting should ask him to join the NHS board.