The surprise appointment of John Hutton as the new Work and Pensions Secretary has left the pensions industry unsure of what will happen next.
John Hutton, who too over at the Department for Work and Pensions (DWP) yesterday, has previously spent time in both the health department and trade and industry, but has little or no previous experience of pensions and welfare. Until yesterday he was Chancellor of the Duchy of Lancaster to the
With the Turner report due out in less than a month, the timing of the resignation and appointment could not have been more unforunate, and the lack of previous pensions experience of the new minister has caused some concern in the industry, which would have preferred the appointment of someone more well-versed in the complex issues surrounding the subject.
Rachel Vahey, pensions development manager at Scottish Equitable, said the appointment had come as a surprise and would be quite a charge on Hutton, given his lack of experience regarding pension issues, but suggested the civil servants in place at the DWP could provide the new minister with the backing and support needed to get him up to speed quickly.
She adds: “He needs to get to grips with the issues and make an effort to understand where we are now by immersing himself in the subject. As it stands the publication of the Turner report will be unaffected as it is an independent enquiry, but it is up to the Minister to look at its recommendations and decide where to take it forward. The overall effect on pensions reform could hang on whether or not he has a different agenda to Blunkett, in which case there is the danger it could get railroaded or delayed.”
Iain Anderson, director and chief corporate counsel at Cicero consulting, says the Hutton will have a major job on his hands in working towards the deadline of the Turner Report and expressed a worry that the report may end up slipping into December to allow Hutton to come to terms with the huge learning curve he faces over the next few weeks.
“Hutton has an immense job ahead of him, as he is in charge of two very important pillars of Blairite reform in both benefits and pensions. We believe he is going to pursue a distinctly Blairite line and will probably see him push hard for any ideas that come out of Turner,” commented Anderson.
Alasdair Buchanan, group head of communications at Scottish Life, also believes the appointment of a minister with no prior knowledge of pensions would slow up the processes. He says that as the post of Works and Pensions Secretary is a politically sensitive post at the moment it is particularly important to get the decisions right, and that involves learning about and understanding the key issues.
“He needs to get a pretty detailed idea of the background to the main points while understanding the critical importance of issues such as sorting out the State pension system. If he can get up to speed quickly by talking to experts about the key important subjects, and understand them in detail, then he may be able to get by for the time being not knowing the other areas in such precise detail,” says Buchanan.
Meanwhile John Jory, deputy chief executive of B&CE benefit schemes, welcomes the appointment as a positive move.
He says: “The good thing about this appointment is that Hutton is a noted reformer and what the pensions industry needs is someone who is prepared to make unpopular decisions in order to solve the problems of the pension crisis. We need someone who will read the Pension Commission report and be prepared to take the appropriate action, so this could be good news.”
In a statement regarding his new role in the cabinet, John Hutton says the Prime Minister has made it clear that his job is to press ahead with the government's radical welfare reform agenda so that rights are properly matched with responsibilities.
Hutton says: "We will reform incapacity benefit so it continues to support those who genuinely cannot work but can better help and support those who are able to return to work. And we will address the challenge of creating a pension system that allows people to enjoy a secure retirement in a country where there will soon be more people over the age of 80 than under the age of five. I am very much looking forward to that challenge.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected].IFAonline
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