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Industry fears delay to pension reforms as Blunkett resigns

Appointment of Blairite Hutton ‘could open the way for citizen’s pension’

The resignation of David Blunkett as Work and Pensions Secretary and his quick replacement with Blairite John Hutton could undermine the timetable for reform, warn industry experts.

Hutton is the fourth Work and Pensions Secretary in little over a year. Alan Johnson took over from Andrew Smith in September 2004 before being moved to the DTI in the post-election reshuffle and replaced by Blunkett.

Hargreaves Lansdown head of pensions research Tom McPhail says the timing of the resignation could not have been worse, coming less than a month before the publication of the Turner report.

McPhail says it will be impossible for Hutton to get up to speed with pensions in the next few months. He believes his influence will first be seen in the Government’s official response to Turner, due next spring.

He says the challenge is for the Government to announce any reforms by spring 2007, as any later would be too close to the next election and genuine reforms are likely to be unpopular with the electorate.

He says, unlike most of the Treasury, Blair is still open to persuasion over the possibility of a universal or citizen’s pension, so another Blairite in the job could make this avenue more likely.

Hutton says he will press ahead with the Government’s “radical welfare agenda”.

Cicero Consulting chief corporate counsel Iain Anderson says the change means the pension timetable may slip back, with the Turner report possibly delayed until December, as Hutton will be concentrating on the incapacity benefit green paper, also due this month.

McPhail says: “It will be hard for Hutton to affect the agenda over the next few months as he has so much to get up to speed on. His first influence should be in the Government’s spring response but the challenge will then be on to suggest reform by spring 2007.”


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