James Purnell, the Secretary for Culture, Media and Sport, has replaced Peter Hain as Secretary of State for Work and Pensions, reports the BBC.
Hain resigned today after the Electoral Commission involved the police in an investigation into £103,000 in undeclared donations.
Purnell had held his role at the Department for Culture, Media and Sport since June 2007.
He last worked in pensions in 2006 as Minister for Pensions Reform after holding the Minister for Creative Industries and Tourism role from May 2005.
He also sat on the Work and Pensions Select Committee in the House of Commons from 2001 to 2003 and the chair of the All Party Group on Private Equity and Venture Capital from 2002 to 2003.
Before joining Parliament he worked as a researcher to Tony Blair during his time as Shadow Employment Secretary from 1989 to 1992.
He went on to become head of corporate planning at the BBC from 1995 to 1997 before returning to work for then Prime Minister Tony Blair as special adviser on culture, media, sport and the knowledge economy from 1997 to 2001.
Commenting on the appointment, Ian Hammond, managing director of Rowanmoor Pensions, says: “Nobody ever seems to stay in this job long enough to really make an impact."
He says Hain failed to make significant achievements during his time as Secretary: “The other problem is that he was Welsh Secretary as well. It was downgraded to a part-time job. It was the same with Blair. It was almost a stepping stone to greater things. Brown, because it’s something financial and the Treasury is involved, wants to keep people in there that he feels in control of, like Darling in the Treasury."
Hammond would like to see whether Purnell “can put some meat on the question of personal accounts” and “whether he can listen to the criticisms abounding in the market place or whether he takes a purely political stance."
Hammond warns personal accounts must change to prove successful “and it’s not something they can change six months before they come in".
Mike Morrison, pension strategy manager at Winterthur Life, says: “James Purnell was Pensions Minister before. I admit I thought he was doing a good job. It’s good to have someone in who has got some experience in the portfolio and being from a pensions background, understanding pensions problems, hopefully the industry can work with him to resolve problems.
“We need to look at some of the outstanding issues on personal accounts, particularly means testing. People have said means testing could dissuade people from personal accounts. We need to make personal accounts a real success, and take a whole review of retirement and the options available to people at retirement."
He says of Hain: “He maintained the status quo and the policy decisions available were ongoing so he kept them going. With James Purnell what we want is to keep them going and make them successful.”
Ian Naismith, head of pensions market development at Scottish Widows, says: "It is very disappointing that we now have a fifth Secretary of State for Work and Pensions in the last three years. Such frequent changes are highly disruptive at a time of great change in pensions legislation.
"However, we welcome the appointment of James Purnell as the new Secretary of State. Having been Minister for Pensions Reform before joining the Cabinet he will hit the ground running, and during his previous time in the department he demonstrated a good grasp of the issues and a willingness to engage with all stakeholders."
Steve Bee, head of pensions strategy at Scottish Life, says: “I welcome James back as he at least understands the importance of pension issues. I think it's fair to say that James didn't agree with me that a pound saved in a pension should make savers at least one pound better off than non-savers.
“Things have moved on while James has been away and I guess he'll notice now that it's not just me going on about this important issue any more. The way that the system of means-tested support for the elderly can devalue, or even completely destroy, people's savings is something many others are extremely concerned about as the Pensions Bill has been going through its second reading and committee stages.
“Even if we couldn't agree that pensions ought to provide proper value for money if people are to trust the system and benefit from it, perhaps James will come back from his break and see things from a different perspective - I hope so.”
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