Restoring the public’s confidence in pensions took a big step forward yesterday. Mel Stride was appointed to be Secretary of State (SOS) for the DWP. It means that for the first time since David Gauke held the post, we have a minister who knows about pensions and who can represent the interests of those with funded and unfunded pensions (e.g. all of us) at the highest level of Government.
It also means we will have a DWP that, whoever is pensions minister, will be able to work with the Treasury in lockstep with their Secretary of State. Stride was Financial Secretary to the Treasury under Theresa May and his authority over monetary and fiscal policy was recognised by his appointment as Chair of the Treasury Committee.
He has been much in the public eye (and on this blog) for the Treasury Select meetings held in October discussing the impact of the micro-budget and the LDI Crisis, the latter is reported on here.
The big projects still to be delivered by the DWP, during the time Guy Opperman’s was in office, fell short because there was insufficient traction from the Treasury. In particular the advancement of Superfunds and the development of CDC. These projects should receive a new impetus.
Stride’s appointment will also help bridge the gap between the Treasury’s regulators – the FCA (and by proxy the PRA) and TPR. Hopefully Stride’s experience of the firestorm created by LDI will mean a fundamental reappraisal of the DWP’s draft funding regulations and its companion, TPR’s DB Funding Code. It may also help with the logjam around EU rules concerning pension scheme solvency and may even result in a review of the accounting standards that many believe were the root cause of the recent problems.
To have someone in charge who commands the support of most parliamentarians (he was leader of the House of Commons for a time) , will make it much easier for the lessons of the LDI crisis to be properly explained and learned.
Finally, Stride inherits a potential political storm over the upgrade of the state pension and associated benefits, most importantly pension credit. This as early as next Monday when Jeremy Hunt is likely to announce what will be cut. The triple lock is not secure in Liz Truss’ promise, there is no guarantee that benefits will increase by inflation (despite inflation being toughest on those on benefits. It will take Stride to manage what looks like inevitable controversy over choices made on retirement benefits (and even more contentiously Universal Credit).
I appreciate that this is a lot of expectation to be heaped on Stride’s shoulders but they are broad shoulders.
I hope that Stride will appoint junior ministers who can support him.
Farewell Chloe Smith
Chloe Smith departs to the backbenches after only a few weeks in post and with nothing to be said about her time in office that will be remembered. This is a shame for her personally, I hear nothing but good of her and I’m sure that in time she will find her way back to high office.
She replaced Therese Coffey who is now the Environment Minister having achieved a rare feat of being the SOS of the DWP, Health and DEFRA in little more than a month.
The wider picture
Mel Stride and Rishi Sunak are political allies and in the fractured world of Conservative politics that is good news. There are many members of the new cabinet for whom “ally” is not a word that applies historically.
The daunting task of Rishi Sunak is to accommodate those who have opposed him in the past, (Braverman, Coffey, Cleverley and Wallace) and build a consensus around known allies (Raab,Keegan, Hunt and Stride).
But – parochially – the news of Stride’s appointment to the DWP is a great step forward for pensions and we can breathe a sigh of relief that we have , for the first time in a long time, a person in charge who has the confidence to deal with the tough complexities of pensions.