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IPE special report May 2018

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Hutton’s appointment may delay pensions reform

UK – The appointment of John Hutton as work and pensions secretary following David Blunkett’s resignation yesterday may result in further delays to UK pensions reform.

The timing of Blunkett’s resignation was labelled “extremely unfortunate” by The Pensions Advisory Service (TPAS) technical director Des Hamilton.

According to Hamilton, it is going to take Hutton at least six months – the same time as Blunkett’s tenure as secretary – to get to grips with the complex pensions landscape. This may push back pension reform even further.

“This is better than the government rushing solutions, though,” he told IPE.

“I don’t think it’s a disaster. We’ve waited so long, we’ll just have to wait longer.”

However, Alan Pickering, Watson Wyatt senior consultant in the retirement practice, believes that David Blunkett’s resignation “is potentially a disaster”.

“To be a good secretary of state for work and pensions, you need three main characteristics: political vision, the ability to bang heads together as you can’t please everyone all the time, and a common touch as you need to bring people with you,” Pickering told IPE.

“Blunkett had these characteristics in spades. Hutton has two months to prove he is Blunkett’s equal.”

Against the backdrop of the UK’s spiralling pension funding crisis, reforming the state pension provision and encouraging a savings culture are the two key issues Hutton must address, said Hamilton.

These matters are likely to be covered in the Pensions Commission’s final report due on 30 November. The report is expected to stress the threat of a major funding deficit at the heart of Britain's pensions.

According to Pickering, the government should publish its pensions reform programme in the first two to three months of next year. However, he was not prepared to comment on whether this would become a reality.

“Government has had enough time to get its ducks in a row,” Pickering said. “If the target can’t be reached, then the policymakers are wrong.

“Hutton has a mountain to climb. Let’s hope he’s a good mountaineer.”

On being appointed, Hutton, 50, stated: "The prime minister has made clear my job is to press ahead with the government's radical welfare reform agenda.

“We will address the challenge of creating a pension system that allows people to enjoy secure retirement in a country where there will soon be more people over the age of 80 than under the age of five."

Some commentators feel that Hutton lacks Blunkett’s experience, but others see him as having shown in previous posts that he can master a brief quickly.

The continuation of Stephen Timms as pensions reform minister will also ensure some continuity to a department that has been shaken by upheaval.

Hutton has a reputation as a loyal Blairite. He has served as a health minister and last May’s general election he was appointed Chancellor of the Duchy of Lancaster, a post within the Cabinet Office, with a remit to chase up reform and delivery across government.


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