View more on these topics

Hutton facing tough task keeping reform on track

Welfare reform remains firmly on the agenda with the arrival of John Hutton as Work and Pensions Secretary but we all now have to be prepared for the current timetable to slip.

The big question is just how that agenda will be achieved.

The departure of David Blunkett comes at a very awkward moment in terms of contin-uing to deliver pension and benefit reforms.

Reform was due to reach a crescendo with the publication of the DWP’s Green Paper on incapacity benefit reform later this month followed on November 30 by the publication of the Turner report.

By any stretch of the imagination, both these policy platforms would be a major challenge for any minister but they are an even bigger challenge for a new Secretary of State to achieve in just a month.

I expect Hutton to focus on benefit reform during Nov-ember. Therefore, the timescale for the publication of the Turner report may now be under threat, perhaps slipping into December.

Adair Turner, an adept politician in his own right, will want to ensure that the DWP, the Treasury and No10 have seen his findings and are willing to make supportive noises for least important elements in the findings. Having a new Secretary of State at the DWP might slow the process of buy-in considerably.

There is no doubt that Hutton, a fervent Blairite, is an exp-erienced minister and is up to the task ahead but it is the politics rather than the detail of reform which will now be his biggest challenge.

He has spent much of his time in Government at the Department of Health – from 1998 until his appointment as Chancellor of the Duchy of Lancaster – or Cabinet Office enf-orcer on modernisation, with a seat at the Cabinet table following the election this year.

As he took up the DWP job, Hutton indicated his willingness to push ahead, showing no signs of a lack of enthusiasm for battles ahead.

He says: “The Prime Minister has made it clear that my job is to press ahead with the Government’s radical welfare reform agenda so that rights are properly matched with responsibilities. I am very much looking forward to that challenge.”

He went further by specifically placing some markers in the sand for anyone who doubted this enthusiasm.

He says: “We will reform incapacity benefit so that it con- tinues to support those who genuinely cannot work but can better help and support those who are able to return to work and we will address the challenge of creating a pension system that allows people to enjoy secure retirement in a country where there will be soon be more people over the age of 80 than under the age of five.”

There is no doubt that Blair has replaced Blunkett with a real loyalist at a vital moment in his third term.

Hutton will face stiff opposition from many Labour backbenchers who are concerned that many people will be forced off benefits even if they are unable to work.

Strangely, this brings me to the Tory leadership election. It is highly likely that a David Cameron or David Davis-led Tory Party would support Government moves on ben- efit reform in order to drive a wedge between the Prime Minister and a large section of his Parliamentary party.

This is exactly the tactic that the Tories are using on Ruth Kelly’s proposed education reforms which the Tories are likely to support, much to the Government’s discomfort.

With this change in the air, it will be vital to ensure that pension reform continues to stick to deadline during 2006. Last week’s events make that time-scale very demanding indeed.

Recommended

Swip swipes Gartmore’s Stewart

Scottish Widows Investment Partnership has recruited Gartmore’s Alix Stewart to run its corporate bond plus portfolio. Stewart ran Gartmore’s corporate bond fund.

Fund firms’ ad attack to pick up Fidelity fallout

Fidelity’s competitors are launching a multi-million- pound marketing onslaught to go after redemptions from Anthony Bolton’s 5.5bn UK special situations fund. Merrill Lynch is running a 3m ad campaign with its latest poster featuring an envelope with the words, Special Delivery and the postmark “Delivered better results than 99 per cent of the sector”. Richard […]

Ami urges mortgage intermediaries to plan for Hips

The Association of Mortgage Intermediaries has created a factsheet to help mortgage intermediaries to plan for the introduction of home information packs. Ami is concerned too few intermediaries are considering the impact Hips could have on their business, and hopes the factsheet will encourage firms to plan ahead.Hip implementation could present estate agents, surveyors and […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment