Shaking up at the DWP- how will politics effect pensions and payroll?

As we all know by now, the DWP are very proud of auto-enrolment which former Pension Minister described as “that hen’s tooth – a public policy success”. At the time of writing, I should be in a meeting chaired by the Pension Minister labelled an “auto-enrolment update”. I hope that others attending (many payroll people) had the foresight to phone ahead as this meeting was cancelled – though none of the participants was told!

The shake-up at the DWP is not helpful and the question is how unhelpful. I’m organising my thinking around four risks

  1. The risk that small employers see the pensions in chaos signs and give up on auto-enrolment
  2. The planned improvements to workplace pensions, pencilled into the Pensions Bill are scrapped
  3. The current political chaos becomes contagious and spills over into DWP’s operational unit- the Pensions Regulator
  4. That we see an about turn in policy and all the preparation for 2016 onward is wasted.

I have to say that I see risk 4 as unlikely, it is not just the DWP that crows about AE, it is the Government and they have precious little else to crow about just now.

In reverse order, I see the DWP auto-enrolment policy team, led by Charlotte Clark as stable and experienced, they have survived a lot of turmoil since the unit was put together over 10 years ago. Currently they are getting their plans for NEST’s future together, I see no reason for the shake-up to throw them out of their stride. The Pensions Regulator has recovered its mojo since the arrival of Lesley Titcomb. Lesley is ex FCA and Charlotte is ex Treasury, these two women are the DWP and tPR’s best bets and I’m backing them to keep the AE show on the road.

I fear for the Pensions Bill which was introduced at the Queen’s speech. It is Ros Altmann’s baby and though it’s scope isn’t broad, the improvements it should bring to master trusts are important. If you watched the recent Dispatches on the task for employers of selecting a pension, you will know how real the dangers of poor pensions can be.

Moving swiftly on, to my first risk, I’m thinking of a comment by Kate Upcraft made to me this morning

“Hugely disappointed with what’s gone on at DWP, why would a micro employer take pensions seriously when the government thinks it’s time to downgrade?”

Which neatly brings me to the main point of the article. What’s actually happened at the DWP!

Firstly, Ros Altmann has gone. Was she pushed or did she jump?  It was 50/50 – or at least that’s what she told Vanessa Feltz on LBC. Judging by the rest of the interview, the former Pension Minister didn’t sound surprised to be losing her job, not disappointed. She has been back blogging away for the first time since the election, busy telling us her plans for pensions had Brexit not happened. Brexit did for Ros not just because she is uber-remain, but because her allies- Cameron and Osborne, had to leave Government.

But while Altmann (and her predecessors) commanded the title “Minister of State”, the current (and presumably future) Pension Minister will be under-secretaries. Ros “resigned” on a Friday night and over the weekend I got a number of calls from journalists wanting to know what I knew about her successor. The confusion had been caused by Reuters who had misinterpreted a DWP press release about Penny Mordaunt, but for 72 hours no-one knew what was going on. We now know that our new Pension Minister is Richard Harrington, but we don’t suspect he knows much more about pensions than pension people know about him!

As Kate has written, the immediate casualty with what is going on is reputation. The good reputation the DWP had been building up may have been tarnished. If we have more chaos, the damage may be contagious. In a recent blog, Stephen Kelly, CEO of Sage called upon British entrepreneurs and business leaders to step into the breach caused by the failure of Government.

With all national political parties in turmoil, the risk is that there is no hand on the tiller. Thankfully the DWP has strong leadership as does tPR but both will need our support in the months to come.

work and pensions

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to Shaking up at the DWP- how will politics effect pensions and payroll?

  1. DaveC says:

    Thanks for sharing this information Henry.

    I’ll admit I can’t keep up with everything going on in pensions these days but I’m still very interested in what the general outlook is for those saving for their futures.

    It’s quite sad to see that government appears to have tripped up here and private enterprise is having to keep things steady, despite not knowing what the future actually holds in terms of policy.

    It’s yet another argument for introducing much more education to employees generally. Auto-enrolment is a good thing, but part of me would like to see it go further to the point those employees actually WANT to be engaged and just DIY… so the company doesn’t even have the responsibility any more.

    I know that is going full circle again, but engagement would solve so many problems here.

    Government will just spend millions and billions of tax payers money doing good and bad things, but the net effect still seems to be engendering apathetic outlooks from end users and to a lesser extent, industry.

    I keep telling my wife to aggregate her funds into the ‘best’ one, but the paperwork still ends up dropping into the ‘pension’ pile and never getting looked at after the annual statement arrives! Amazing considering the hundres of pounds a year she could save in charges alone!

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