Labour has questioned the competence of pensions minister Steve Webb after an independent report labelled the Government’s pension charge cap consultation “not fit for purpose”.
In October, the Department for Work and Pensions proposed three possible auto-enrolment charge caps – 0.75 per cent, 1 per cent or a two-tier “comply or explain” cap. The cap is due to be introduced for new schemes in April next year.
The DWP has faced widespread criticism after the Regulatory Policy Committee, an independent body set up by the Government to scrutinise regulation, said the impact assessment that accompanied the charge cap consultation was “not fit for purpose”.
However, the DWP insists the RPC’s damning verdict will not derail its plans.
Labour shadow pensions minister Gregg McClymont has reiterated calls for the DWP to pursue full disclosure of charges before implementing a cap.
He says: “The Government performed a spectacular U-turn in suddenly deciding in favour of a charge cap, so I doubt it will perform an even more spectacular reverse U-turn.
“But Steve Webb has to move quickly to restore confidence in his competence. It is crucial for the DWP to actually understand what it is they are capping – this means full disclosure of charges.
“Having got itself into an avoidable mess, the DWP must convince Parliament it has full sight of all the charges being imposed on people’s pensions before proceeding.”