May drops pension pledges from Queen's Speech

Of 27 bills announced by the Queen, eight related to Brexit and its implications for key industries.

As well as a bill to convert European Union rules into UK law, there were measures on trade, customs, immigration, fisheries, agriculture, nuclear and sanctions.

But other key manifesto plans have either been axed or delayed after the Conservatives lost their majority in the general election.

Proposals to axe the winter fuel allowance for well-off pensioners, scrap the triple lock on pensions, expand grammar schools and end free school lunches for infants were dropped while other proposals, such as a cap on energy bills and reforms to social care funding, will be put out to consultation.

The inconclusive election outcome means that difficult issues like the funding of social care have once again been kicked into the long grass.Steve Webb

Ahead of the general election, the Conservatives proposed instead of a £118,000 means-test floor this would be cut to £100,000 and would include the value of your home in all circumstances when assessing who would pick up the tab for care fees.

So if you needed homecare, or you were in a care home and still had a partner living in your house, the value of your property would still count against you for council funding. 

Suddenly, millions more people would be hit by social care costs - most particularly those families whose loved ones had dementia or other conditions that did not count as 'health' needs. 

Many speculated it was this proposal that resulted in Prime Minister Theresa May losing her outright majority in the House of Commons and having to appeal to the Democratic Unionist Party to work with her Conservative government.

Social care

Royal London’s director of policy, and former coalition government pensions minister, Steve Webb said: “The inconclusive election outcome means that difficult issues like the funding of social care have once again been kicked into the long grass.

"Individuals hoping to plan ahead how best to meet their care costs have been left in limbo.

"No-one can know with any certainty how much they might have to pay for their care, how much the government will contribute and whether they will have to sell their home.

"But the lack of a government majority could be an opportunity to seek cross party consensus on social care funding, so that a system can be put in place which will resolve these issues once and for all and give clarity to families wrestling with these complex issues."

Tom Selby, senior analyst at AJ Bell, said while the Queen’s Speech confirmed a consultation will put forward care fee reform proposals given the hostile reception given to the Tories so-called ‘dementia tax’, it would be no surprise to see this confined to the dustbin.

He said the speech also raised concerns over a lack of action to address the spiraling cost of the state pension.

Mr Selby said: "As average life expectancy in the UK continues to rise, the cost of providing the state pension will mount.

“The Institute for Fiscal Studies estimates the state pension will cost an extra £30bn in today’s terms in 50 years’ time – and even moving to a double-lock would do little to alleviate these cost pressures.

“Reports suggest the government has decided to retain the triple-lock, which randomly ratchets up the payment in years when earnings and inflation are below 2.5 per cent.

"While this may be politically necessary to woo the Democratic Unionist Party, it remains illogical and is an obvious manifestation of short-term deal-making overriding long-term thinking.

“This state pension system is patently unsustainable over the long-term and at some point, someone will need to either reduce the amount people get or increase the age at which they get it.

"Unfortunately Prime Minister Theresa May has a wafer thin majority and as a result bold, necessary reforms to increase the state pension age faster risk being kicked into the long grass.

“We are also still waiting for the government to implement a crucial clampdown on pension scammers, including a ban on cold-calling. These are incredibly important consumer protection measures that must not be further delayed."

Pensions

However the Queen’s Speech was silent on a new Pensions Bill and a Philip Green Charter.

Kate Smith, head of pensions at Aegon, said: “We had hoped to see a new Pension Bill to address issues highlighted by the pension industry over a number of years to give savers greater protection.

"The Queen’s Speech was disturbingly quiet on any legislation to ban pension cold-calling or give schemes and providers greater powers to block suspicious transfers.

"This is particularly disappointing as pension scams won’t just go away by without some serious action. In fact they’re actually on the rise and while they constantly evolve, more and more people are being parted from their hard-earned pensions.

"Limiting the right to a statutory transfer could potentially safeguard millions of pounds from scammers. The government must keep this on its agenda, speak up and take the issue seriously.

“Another piece of missing legislation was the so-called Philip Green Charter.

"In their manifesto, the Conservatives had pledged to deal harshly with unscrupulous employers who deliberately underfund their defined benefit schemes putting members’ pensions at risk. It appears that the government has backed down on this potentially controversial change.”

Housing

Looking at housing measures in the Queen's Speech, James Davis, chief executive and founder of online lettings agency Upad.co.uk, said proposals will now be brought forward to ban unfair tenant fees.

He said: "Ultimately, market forces haven’t prevailed in all of this. High street lettings agents ludicrously charge over £300 simply to press print on an identical tenancy agreement to renew for the following year.

"Long suffering tenants (as the government has coined Jams “Just About Managing”) have no choice but to pay it as renting is a necessity; it is not like if a shop put up its prices and the amount it sold would go down.”

Russell Quirk, founder and chief executive of eMoov.co.uk, said: “So we reach another political juncture, punctuated by excessive Autumn Statements, Budget announcements and Queen's Speeches.

"The government yet again are setting out to revitalise their approach to housing only for us to look back come the next occasion and realise that the previous hype and hot air has evaporated with no tangible action what so ever. 

"Where housing is concerned at least, these events have become little else than soothing platitudes for the masses, akin to a Marie Antoinette type approach. But the cake never comes.

"Promises to address unfair tenant fees and promote fairness, transparency and prosperity in the housing market while building more homes, are worthy intentions indeed but ones that are all too familiar yet remain unresolved."

stephanie.hawthorne@ft.com