The Lifetime Isa could pass into law without being subject to the scrutiny of the House of Lords, former pensions minister Steve Webb has warned.
Mr Webb, who is now director of policy and external communications at Royal London, said if the bill containing the Lifetime Isa is classed as a money bill – as many Treasury bills are – it would bypass the House of Lords.
“That means it won’t even be considered by the House of Lords, which is the only place the government can be defeated on it,” Mr Webb told pension experts at the ILC-UK Retirement Income Summit in London yesterday (13 June).
“So it might be great, or it might be something that should have been strangled at birth, one might think.
“Whichever it is, it is not going to be scrutinised, a) by the extremely knowledgeable expert members of the House of Lords, but b) by a place where the government can lose votes, except if the party were to fragment.”
The biggest change I can see in pensions government policy since the election is the almost total takeover by the Treasury. Steve WebbHe said this danger was a result of HM Treasury taking “absolute” control of pensions, resulting in retirement policy that was not subject to review in the upper house.
“The scrutiny of pensions policy in the last parliament… was particularly done in the House of Lords, where the government doesn’t have a majority,” he said.
“Now, the biggest change I can see in pensions government policy since the election is the almost total takeover by the Treasury.”
“It was always there, it was always a battle – a partnership, sorry. But now it has become almost absolute.”
Mr Webb said this was particularly concerning because the Treasury sees itself as a savings ministry rather than a pensions ministry – that is, it is concerned with taking pressure off the budget, rather than achieving the best outcomes for retirees.
A Treasury spokesperson told FTAdviser that the Lifetime Isa would be included in the Lifetime Savings Bill announced in the Queen’s Speech, rather than the Finance Bill announced in the Budget.
The Speaker of the Commons will decide whether this bill is classed as a money bill, the spokesman noted, declining to comment on Mr Webb’s accusations of taking “absolute” control of pensions, but pointing out the position of pensions minister was held within the Department of Work & Pensions.
Robin Melley, a chartered financial planner and director of Matrix Capital, said he supported the idea of a Lifetime Isa “in principle”, but added it “potentially creates some confusion”.
He continued that constant changes to pension policy were unhelpful. “I wish the government would just leave pensions alone for a while, because continuing to move the goalposts puts people off saving.”
Responding to Mr Webb’s comment that the Treasury was more concerned with budget savings than retirement outcome, he said the “cynic” in him was inclined to agree.
james.fernyhough@ft.com
