Work and Pensions select committee chair Dame Anne Begg says Chancellor George Osbrone’s shock Budget reforms have put the political consensus built around pensions policy at risk.
Speaking to Money Marketing, Begg says it is “crucial” to get cross-party support for reforms “so any new Government doesn’t come in and tinker”.
The Turner Commission’s final report, published in 2006, set out a future path for pensions policy supported by all the major political parties. The report called for the introduction of auto-enrolment and the creation of a national pensions savings scheme that led to Nest being established.
Begg says the Chancellor’s decision to announce radical changes to the pension tax system without consultation puts the consensus at risk.
She says: “That is the area I worry about because it didn’t go through the scrutiny the other parts of the pensions jigsaw did. There was no attempt to build a cross-party consensus or a long-term view as to whether this was the right thing to do.
”It might be the right thing but because it was announced in a Budget there was no opportunity to hold that conversation with people across the political spectrum to make sure it everybody bought into it.”
Begg also warns Government reforms that will see a single tier, flat-rate state pension introduced in April 2016 could yet face criticism from the public.
She says: “People see the headline that the flat-rate pension will be £155 a week and they think they are going to get that. Many do not realise there are also calculations around the foundation level, especially if they have been contracted-out. That is all very complicated and not easy to understand.
“The public outcry, if it comes, will come later.”