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Webb takes on role of UK pensions minister

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  • Webb takes on role of UK pensions minister

UK - Steve Webb, the former shadow work and pensions spokesman for the Liberal Democrats, has been appointed the minister for pensions.

 

Webb confirmed the appointment through his online Twitter account and will join Chris Grayling, former Conservative Party shadow work and pensions secretary, as a junior minister in the Department for Work and Pensions (DWP) under the leadership of Iain Duncan Smith. (See earlier IPE article: Iain Duncan Smith appointed UK pensions secretary)

 

Dr Ros Altmann, an independent pensions expert, said Webb's appointment was a "great choice" and provided some "real hope of remedying the dreadful damage of the past 13 years".

 

She commented: "Steve has a detailed knowledge of pensions, having shadowed the brief for over five years and he has developed sensible, radical policy proposals that could finally set us back on a sustainable path for the future. Given our demographics, it is vital that we deal with the pensions crisis as effectively and quickly as possible."

 

Altmann said she would support some of Webb's reform ideas, including a review of the National Employment Savings Trust (NEST) to address levelling down, early access to pensions, changes to higher rate tax relief and an end to mass means-testing for pensioners.

 

Altmann said: "Steve has warned about the dangers of NEST and he is absolutely right.  If we auto-enrol people into a system and then they lose most or their entire pension on retirement, the government would be open to challenge. If the citizen's pension is introduced, NEST becomes safer, but he has also rightly warned about the risks of levelling down and would like to see the employer contribution requirements increased. This would be more controversial, but is certainly an important issue to consider."

 

On the issue of tax relief for pensions she claimed Webb had previously been in favour of ending higher rate tax relief, and while this may not be acceptable to the Conservative party, she warned that some reform is necessary.

 

"We do need to undo the dreadful changes that were made in the last two Labour Budgets, which have left the system in an almighty mess. The rules for people earning over £130,000 are virtually incomprehensible and will only hurt, not help, pension provision."

 

She added: "We are likely to have some commissions and reviews that will sort out the detail, but I am more hopeful than I have been for years that we may be heading for real and positive change to set us on a sustainable pensions path at last."

 

The post of pensions minister has been seen as a revolving door by many in the industry. Under the previous Labour government, 11 ministers were appointed as pensions minister or equivalent alongside nine work and pensions secretaries in 13 years.  (See earlier IPE article: Eagle lands in pensions hot seat)

 

Webb's appointment also offers a chance to see how the new coalition government will work in practice, with UK pensions reform now being led by a Conservative and Liberal Democrat partnership.

 

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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