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Labour questions Webb’s competence after pension charge cap criticism

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.” 

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. The problem is that the DWP and Webby of course, did not understand what charges actually were and how they were calculated.
    Why did the FCA not tell them ?
    Perhaps they didn’t know either ?
    What a mess at this very late stage, what about the schemes already in place ? Are these now not compliant and or legal ?
    What a shower they are.

  2. My interest was piqued at seeing news of the creation of a Regulatory Policy Committee. Perhaps, I hoped, this might be something along the lines of the Independent Regulatory Oversight Committee that’s so desperately needed and overdue to rein in the wilder and barmier excesses of regulatory policy and rules.

    So I did a Google search, only to find that this new RPC is run by the Department for Business Innovation & Skills (a government department, so in what way is it independent?), and look what a great job that lot have done so far in terms of enforcing the Statutory Code of Practice for Regulators ~ absolutely zilch.

    My enquiry on this very subject to the Dept. for BI&S was swiftly punted on to the Treasury, which didn’t know what to do with it, kicked it around from desk to desk for several months before eventually, after much chasing, issued a bland response that effectively amounted to nothing at all.

    What powers does this new RPC actually have? Unless it has unassailable powers to say to the regulator or to government ministers or their departments: This is wrong and you’re not going to do it or This is wrong and you’re going to have to undo it, is it likely to be any more effective than the TSC? Of course not, it’ll be just another talking shop with no real authority to change anything.

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