Now that the general election dust is slowly beginning to settle, there is a departing minister whom I want, perhaps surprisingly, to pay tribute to – and another person I would like to welcome into her new role in Government.
The person I want to offer praise to is Steve Webb, who lost his north Bristol parliamentary seat to a Tory challenger last week.
Webb was, without doubt, the most engaged pensions minister since the post was first created shortly after Tony Blair’s 1997 election victory.
Before then, other ministers were allocated pensions as part of a broader welfare portfolio. Yet despite Blair’s decision to create a specific office to deal with pensions in 1998, it is easy to forget how disdainfully the role was treated by Labour in the 12 years before Webb took it on.
Starting with John Denham in 1998, who barely survived five months in office, and ending with Angela Eagle’s 11-month stint in the job, a total of 12 ministers were appointed between 1998 and 2010, one of them twice. None lasted more than two years, most far less time then that.
For a long while it seemed as if being pensions minister was a way of paying someone a large ministerial salary for a short period and not expecting much of them.
Often this was part of a sub-plot of musical chairs in which personal and political factions were rewarded – or penalised – for their loyalty to various key figures in the Labour Party, including Tony Blair, Gordon Brown and even, unbelievably, John Prescott.
If you appoint someone to that office for say, 15 months, you are clearly not requiring them to engage with the subject in any meaningful sense. You certainly are not expecting anyone to radically redraw the retirement map for the next 30 years. Unsurprisingly, none of Webb’s predecessors disappointed in that respect.
In complete contrast, Webb had a vision for pensions and retirement planning in the UK that far outstripped previous incumbents. He almost single-handedly elevated pensions into a subject that resonated with the general public, particularly the decision to allow retirees far greater access to cash in their savings pots.
Webb could be infuriatingly disingenuous. His comment about not being too bothered if the money liberated as a result of the government’s pension reforms were used to buy Lamborghinis was one such example.
A failure to join the dots of his reforms and come up with a more robust system of advice to newly-retired people than Pension Wise, which looks to be a recipe for disaster, is another.
Inevitably, there was also some ministerial grandstanding. For example, Webb’s announcement in March 2014 of an end to so-called “rip-off charges” and hidden costs for pensions, with the introduction of a 0.75 per cent price cap for default funds in qualifying occupational pension schemes. The new rules came into effect in April this year.
There were only two problems with such an announcement. The first was it was limited to default funds, most of which are run on a semi-passive basis anyway. If you are going to stick your money into what is to all intents and purposes a passive fund, Fidelity’s tracker, not to mention those from several other managers, charge half that amount.
The second point, as made by Hargreaves Lansdown’s pensions guru Tom McPhail, is the average charge for a workplace contract-based pension was then 0.84 per cent a year. So the government was only driving down the cost of pensions by less than 0.1 percentage point for a typical pension scheme.
Nor was Webb prepared to tackle the underlying issue of dormant pension schemes, both occupational and private ones, many of which charge far in excess of the rather pathetic price cap he announced last year. Tens of billions of pounds are held in such schemes and reform in this area is painfully slow.
Still, better Webb than most of the non-entities who preceded him. Finding a successor to him will be hard.
Which leads me to Ros Altmann, whose elevation to the Upper House and appointment as a prospective “consumer protection minister” was announced midway through the election campaign itself.
I am pleased for Ros, whom I greatly admire – although her subsequent breathless email to hundreds of financial journalists and other contacts telling us all how important it was to vote Conservative seemed a bit naïve. I am sure her enthusiasm for the Tories was genuine, it just reminded me of the Mrs Merton interview with Debbie McGee, wife of “millionaire Paul Daniels”.
Her appointment also reminds me of Gordon Brown’s so-called “government of all the talents” in 2007, in which he appointed former CBI chief Digby Jones as trade minister.
Years later, Jones wrote of his time in office: “The entire place was risk averse, so that the most common advice all too readily accepted by career politicians not wanting to blot their ministerial-progress copybook was to do nothing. And I never managed to change that.
“But what I hadn’t expected was the omnipotent suffocation by process and the obligatory emasculation of original thought and initiative. The governmental machine demanded complete obedience in a way which anyone outside the Westminster bubble wouldn’t have believed.”
I wish Ros well and hope she does not suffer the same fate.
Nic Cicutti can be contacted at email@example.com