The Government will legislate on the structural reform of banks and reforming adult social care and make changes to state and public sector pensions, according to the legislative agenda set out in last week’s Queen’s Speech.
Speaking in the House of Lords, the Queen said the Government’s first priority remained reducing the deficit and restoring economic credibility, adding it will also work to boost growth.
She said Government would legislate to reduce burdens on businesses, including limiting “state inspections” of firms. Legislation will be brought forward to “promote enterprise and fair markets”.
The speech, prepared by members of the cabinet to set out the legislative agenda for the next Parliamentary year, confirmed the Banking Reform Bill will implement the recommendations of the Independent Commission on Banking. “Measures will be brought forward to further strengthen regulation of the financial services sector,” she said.
Reform of the state and public sector pensions will go ahead, with two separate pension bills. The Department for Work and Pensions is expected to announce details on a flat-rate pension worth £140 per week in the coming months. The speech claims it creates a “fair, simple and sustainable foundation” for private saving, adding: “Legislation will be introduced to reform public sector pension in line with the recommendations of the Independent Commission on Public Service Pensions.”
The commission’s final report, published in March 2011, suggested public sector schemes should move from a final-salary to career-average pension, that the normal pension age in most public sector schemes should be linked to the state pension age and the introduction of a “clear cost ceiling” to limit taxpayers’ exposure to the schemes.
The speech also confirmed that draft legislation will be published to modernise adult social care and support in England. The Government was expected to publish a progress report on the funding of long-term care and its response to the recommendations of the Dilnot Commission alongside a draft bill in the spring. That has been delayed until the summer and there concerns it could be sidelined until after the next general election.
Radcliffe & Newlands IFA Mel Kenny says: “Pensions, care funding and bank reform are important long-term projects, but there is a risk with the coalition parties trying to please everyone that reform becomes a bit of a dog’s dinner.”
The Public Sector Pensions Bill will begin implementing agreements between Government and trade unions over changes to pensions, introduce career-average schemes in place of final-salary pensions and bring in a system where public sector workers are asked to work longer and take their pensions in line with the normal state pension age. No one will be forced to work longer and adjustments to payouts will be made for those who agree. It will also move to ensure any unforeseen changes to costs of public sector schemes are borne by members and employers.
The Pensions Bill will replace the current means-tested state pension with a single-tier pension expected to be worth £140 a week. It will also bring forward the increase in the state pension age to 67 between 2026 and 2028 and ensure the state pension age is increased in future in a way that takes longevity into account, which is expected to be in the shape of an automatic mechanism. The Government claims this would “create a fair, simple and sustainable foundation for private saving”.