So it’s farewell to Steve Webb, widely considered to be the best pensions minister in decades, after he lost his seat of Thornbury & Yate to the Conservatives in the General Election. In a tight race, Mr Webb fell 1,495 votes short and joined a long list of high profile Liberal Democrats who did not survive the night as MPs.
But after five years of unprecedented change in the pensions industry, has Mr Webb left a lasting positive legacy, and what should we expect from an entirely Conservative administration?
It is easy to forget now, but before Mr Webb became pensions minister five years ago, the role had been filled by a merry-go-round of MPs who had little understanding of the industry, little interest in staying for long in the role and, therefore, made little impact. In 13 years in government Labour had worked its way through 15 pairings of pensions minister and work and pensions secretary since coming to power in 1997. Remember Angela Eagle or James Purnell? No? Not surprising – they probably don’t remember much about being pensions minister either.
Steve Webb’s long held interest in retirement, evident from the Liberal Democrats’ own pre-coalition manifesto pledges to reform tax relief and introduce a flat-rate basic state pension, was a breath of fresh air. His consistent commitment to reform was responsible for two key long-lasting changes which he was responsible for implementing: auto-enrolment and the simplification of the state pensions system. Although the latter will take time to work through, it was – for once – a genuine simplification reinforced by the famous ‘triple lock’ guaranteeing an inflation-linked uplift.
The Conservatives have promised to follow through with his single-tier state pension system – no-one is ever shy of assuming ownership of a good idea. And while the auto-enrolment project was a cross-party initiative, Mr Webb’s successful management of its roll-out should not be underestimated.
Only a few years ago there were many pensions experts who feared that widespread failure at the Department for Work and Pensions (DWP) to understand key details could derail the project. Mr Webb was able to ensure that did not happen, at least not on his watch. And while the pensions freedoms initiative was largely a conservative plan, his unwavering support for it has helped many dubious professionals to overcome their initial skepticism.
But, overall, has it been a benefit to have a dedicated pensions minister – or would we have been better off with a part-timer who didn’t really do anything? In October last year, the Institute of Directors (IoD) suggested that the post of pensions minister should be abolished in order to remove political intervention and give the industry a breather from the never-ending cycle of reforms and changes.
At the time, Mr Webb accused the IoD of simply being tired, pointing out that much more work was still needed. But with the pensions lawbook running into hundreds of pages, the case for ‘less is more’ has merit.
In addition, with his departure, a number of projects and ideas are left hanging. The proposal to allow annuitants to re-sell their annuity back to the market as an extension to the pensions freedom initiative is left without its champion.