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Malcolm McLean: What would Boris Johnson PM do for pensions?

The likely future premier has yet to prove his skills in pension policy

Despite the best endeavours of Jeremy Hunt, it is now looking increasingly likely Boris Johnson will become the new leader of the Conservative Party and thus the next prime minister of our country.

His priority on taking up office will inevitably be to sort out Brexit – the topic that continues to dominate political debate and divide opinion, not only among politicians but across the nation as a whole.

But there are many other issues that will command the PM’s attention, and Johnson cannot simply be a one-trick pony once he has got stuck in to the job.

What can we expect from him on the pensions front?

‘Not a great deal’ is probably the short answer. He does not have a particularly strong record in pensions, which is not the best sign for a subject that often tends to get pushed down the policy ladder anyway.

Let’s consider his record, such as it is.

As far as I can see, the last pension-related issue he cast a vote on was the 2004 Pensions Bill, which he was largely supportive of despite criticisms from many of his fellow MPs on certain aspects.

In 2014, in his Telegraph column, Johnson wrote about pooling public sector schemes to facilitate investment in infrastructure, seemingly ignorant of the fact that the civil service, NHS, teachers, firefighters, police and armed forces schemes were unfunded. If his intention was to turn these into funded schemes, he did not say so. He referred to over 39,000 public sector schemes, an extraordinary figure. He included university pension funds in this, but even so it is not clear how he arrived at the number.

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In the same year, he cheered former chancellor George Osborne’s pension freedom reforms, but again seemed to misunderstand how pensions worked, claiming that pension contributions were taken from taxed income. Responding to The Observer’s Will Hutton, he wrote: “It isn’t taxpayers’ money, it’s the money that the pensioners have saved up themselves – out of their taxed income!”

Later, as mayor of London, he was advised on pensions by City financier Edi Truell, whose firm, Disruptive Capital, is the main backer of The Pension Superfund. It will be interesting to see what happens to superfund legislation under Johnson as PM.

But in any event, pensions will clearly not to be high on the list of things to do in the early stages.

It is likely that one of Johnson’s first tasks will be to reshuffle his cabinet in order to surround himself with friends and allies rather than critics and opponents who might disrupt his plans – whatever those are – for delivering Brexit.

He may want a new chancellor of the exchequer. Also, both the work and pensions secretary, Amber Rudd, and the minister for pensions and financial inclusion, Guy Opperman, could be replaced. Neither openly supported him in the leadership race.

In fact, the whole Department for Work and Pensions risks being abolished or merged, according to reports in The Telegraph that Johnson’s backers want him to cut the number of government departments from 25 to 12 in a bid to cut costs.

This all raises questions about whether the embryonic pensions bill, which we are told is in an advanced state of preparedness, will be delayed even further or even whether it will ever get off the ground at all.

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And even if it does, will it survive a parliamentary programme curtailed by the possibility of an early general election once Brexit is somehow delivered by the end of October?

What happens over the longer term in the post-Brexit world depends on who forms the next government and what sort of majority it commands.

I hesitate to use the phrase, but we do need a strong and stable government with a majority big enough to address some of the big domestic policy issues that have to date been left in limbo. Issues such as the cost of social care, the long-term future of the state pension and auto-enrolment have been neglected.

The sooner Brexit can be resolved, the sooner these sorts of issue can once more benefit from the focus and energy of our policymakers and wider society. And then, just maybe, we can get back to some sort of normality.

Malcolm McLean is senior consultant Barnett Waddingham 

You can follow him on Twitter @Malcolm_Mclean



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