Naomi Rovnick is right
Ok, there’s a touch of irony in the post but the sight on the lunchtime news , of the future prime minister getting off his train at Kings Cross reminded me that this was not a coup.
Bonds, gilts and shares held firm.The FTSE 100 was actually up 0.72% yesterday. The FT sees Burnham as a way to see off Reform.
The professional pension trade press foresee a change of Pensions Minister as big news but frankly, whatever needed to be done has already been done, the completion of secondary legislation for the Pensions Act to take hold is being written, retirement CDC draft legislate will be here by the end of the year to be enacted some time in 2027.
If Torsten Bell stays as Pensions Minister will be down to whether Burnham has different plans for him and the Chancellor whoever he/she is wants him to do the tough job that needs to be done with the state pension. There are bigger things on Burnham’s mind than pensions and Bell may have different things himself. Frankly, he’s got more of a political career with his constituency in Swansea than he would have done with Starmer.
If Bell leaves, he will be recognised as being a proper pensions minister for slightly less long that Starmer but coming out of his job with a better reputation.
If he stays, then we may even see him take some notice of the Pensions Commission (2). I doubt he’s got much mind for that, I don’t think any of us till we see their proposed solutions and I doubt if any of those will be taken up within this Government.
So for all the drama and the tra la la that accompanied the changing day that was Monday, nothing much will come of it for pensions. We will not get a better pension and though many of my peers seem to find his acerbic humour a little too sharp, I find him quite funny.
As regards the burning question on pension people’s tongues, I suspect that the Treasury have two things that they would say back. The first is that employers cannot afford to pay another tax and the second is that for impecunity to change, we need prosperity and that means growth.
Pensions are important to Government because they can fund growth. So long as we have no growth we will have inadequate pension contributions (unless people change their priorities). That fundamental truth is what Bell meant when lambasting the PLSA (now Pensions UK) in one of his first speeches. Two words were repeated by him again and again. “GET REAL”.
There is a lot to do with pensions to make them VFM, bigger pensions from existing contributions seems what CDC is about to the Treasury and employers. For employers who want the flexibility of drawdown we will see Flex and Fix as the default for DC plans. For those who don’t want or need a regular income, we will have SIPPS, which I see are to have a regulatory spruce up by the FCA.
We really don’t need to worry about changes of leadership or of work and pensions ministers. Bell was smart enough to get his Bill to Act within his first 18 months. If he leaves, he’ll leave a good heritage. If he stays, the better for pensions.
The big threat to pensions is Reform and Burnham’s arrival makes the chances of them taking power substantially lower. Reform are stymied by Burnham’s accession.