Former pensions minister Steve Webb received a knighthood in the New Year’s Honours, as did Andy Murray and Ken Dodd. Only one of the three was for services to pensions.
As Steve’s successor found to her cost, being a good pensions minister doesn’t always have much to do with arriving in the job with a good knowledge of pensions. The current minister, Richard Harrington whose knowledge on pensions on day one was almost zero, already seems set to prove that being an effective minister is less about strong technical knowledge, and more about being able to learn and to work within the machine of government.
Though it obviously pains me to speak positively about someone who now works for a competitor organisation, Steve’s time as pensions minister was undoubtedly a success. He not only delivered on auto-enrolment, he also reviewed and modified the rules to make them more sympathetic to the needs of both employers and members.
The fact that auto-enrolment continues to be a success today is largely thanks to the five years Steve spent in the job. He also took on the huge challenge of reforming the state pension and managed to deliver a positive outcome. For this alone a knighthood seems modest reward for his efforts.
The Liberal Democrat triple lock policy has helped to substantially raise incomes for those in retirement now. Steve also recognised the importance of helping investors to get a better outcome from their defined contribution pensions; he not only supported greater take-up of the open market option, he also facilitated the launch of Osborne’s pension freedom announcement in 2014.
Despite these successes and glossing over the odd policy cul-de-sac such as pot-follows-member and defined ambition, it is striking how much still remains to be done. In spite of the fact that the UK’s retirement provisions have been in a state of almost constant reform for decades now, we are barely standing still, let alone making progress.
Pensions coverage and overall savings rates are far below where they need to be. The pension tax system is an incoherent mess. Intergenerational inequalities are getting worse rather than better and the disparity between the benefits enjoyed by defined benefit scheme members and those in money purchase arrangements should be causing more outrage than it does.
We have far more pension schemes than we need and it is far from clear that they are run and regulated as effectively as possible. For all Steve’s successes, Richard Harrington has a lot of work to do.
Tom McPhail is head of retirement policy at Hargreaves Lansdown