Back to square one, Minister

David Adams on the challenges facing the new Minister for Pensions and the Ageing Society, Rosie Winterton, and the tepid welcome she's received from some quarters

October's Cabinet reshuffle brought a new face into the pensions industry: Rosie Winterton, the new Minister for Pensions and the Ageing Society. But Winterton’s arrival has been met with a cold chill. It's nothing personal, just that there are many people who believe that the appointment of another new minister to the pensions brief was not exactly considered necessary to begin with.

After all, Winterton is the sixteenth minister to have had a brief that included pensions since 1997. Her predecessor, Mike O'Brien, enjoyed a relatively lengthy tenure in the post (all of 15 months), and is generally thought to have done pretty well, having got close to completing the painful process of preparing the Pensions Bill for Parliament. Now, all the experience and understanding he had built up are no longer of any use to the industry. His efforts have been rewarded with an appointment to the new Department of Energy and Climate Change as Minister of State for Energy.

Of course, the government could point out that Winterton's Secretary of State, James Purnell, has been working with a pensions brief for 18 months out of the last two and a half years, or that several of her other predecessors have gone on to hold more senior roles in government, including the current Chancellor, Alastair Darling, suggesting that the pensions industry has not been fobbed off with second rate personnel. But still, it's hard to imagine that this high turnover has been very helpful during a turbulent period.

"I haven't done a comparison to see how long people tend to stay in ministerial posts elsewhere, but I'd be willing to wager that the more senior jobs have enjoyed longer periods of tenure than has been the case with pensions," says Tom McPhail, head of pensions research at Hargreaves Lansdown. "What has tended to happen is that if anyone starts to do well there, they tend to get moved on to better things."

Pensions Bill
Whether or not that particular criticism is valid, the industry could certainly be forgiven for resenting the fact that O'Brien has been moved on before the Pensions Bill passed through Parliament. "This Pensions Bill hasn't been an easy ride," says Rachel Vahey, head of pensions development at Aegon. "There have been some big issues that the industry has been trying to explain to Mike O'Brien, so I don't think it's the most helpful time to be changing the minister."

Indeed, if you consider the complex nature of the disagreements between the different sections of the industry over the course of pensions reform, you'll probably start to feel sorry for Winterton. "The problem is, [as] a minister, you're trying to balance some fairly entrenched positions, within the TUC, consumer bodies, the employers' lobby and the insurance companies and investment houses," says Steve Folkard, head of pensions and savings policy at AXA.

"A good example would be the exemption criteria for good existing schemes to be able to opt-out of Personal Accounts. Insurance and pensions providers have a position, the TUC has one which is different, employers understand the TUC position but are more inclined towards the providers' point of view, and so on. It's very difficult for the minister to find that balance. I don't think it's fair to expect a new minister to really get up to speed with what's going on in less than about six months – and some of them have been there less than a year."

The one thing that any incoming Pensions Minister has in their favour is that the industry they serve really does wish them well (to begin with at least). In that sense, the anodyne yet friendly statement provided by the NAPF's chief executive Joanne Segars could be said to represent a widespread view: "We have welcomed Rosie Winterton's appointment and have already had a productive discussion on outstanding issues in the current Pensions Bill, including on Qualifying Earnings and the current financial climate. We are looking forward to having the same constructive relationship we had with her predecessors."

Past ministers
Nor is it easy finding anyone prepared to criticise any of those who have sat in Winterton's place. "I believe they all had the public's best interests at heart," says Folkard. But, he adds, "the common factor with all of them is that they were all doing a better job when they left than when they started."

Aegon's Vahey believes the best of the bunch were those who took a genuine interest in the issues. She picks out Stephen Timms and John Denham: "They've taken an interest in pensions and looked at the complexities below the headlines," she says. "That's why they've been successful: understanding the issues for consumers but also for employers, and trying to make sure we get the best conclusion for everyone."

Tom McPhail, on the other hand, was more impressed by Frank Field, back in 1997/1998. "He only had a relatively short period in the job: he was kicked out because the plans he came up with were too radical for [the then Chancellor] Gordon Brown," says McPhail. "Nevertheless, he has continued to have a significant influence. He got the ball rolling."

Elsewhere there is praise for the outgoing minister. "In terms of effectiveness, I've got a lot of respect for Mike O'Brien. He very quickly grasped the issues and has worked tirelessly to deal with them," says John Jory, deputy chief executive at the construction industry benefits provider B&CE Benefit Schemes. "He tried to take a balanced view and always had time to listen to views we had and to engage in constructive debate. I think he's done a first-class job – it's just a pity he hasn't been able to follow some of these issues through to a proper conclusion."

Priorities
So which are the tasks at which Winterton must excel to earn similar plaudits? In a neat illustration of the scale of the challenge she faces, everyone has slightly different priorities. The NAPF will continue to press the minister for policies that reduce the regulatory burden on pension schemes and also help schemes to continue to function effectively during this unpleasant section of the economic cycle. Vahey says the minister must focus on shaping the secondary legislation that will follow the Pensions Bill through Parliament. "It's important we get the details correct," she says. "We want to help people save for their retirements, but in ways that don't place too great a burden on employers, because if that happens, it might backfire."

Beyond the Pensions Bill the two really big issues with which Winterton will have to grapple are easy to identify: means-testing, and the implications of Personal Accounts. Then there are further concerns, including the campaign to abolish the age 75 rule, and the growing liabilities afflicting public sector pensions.

Above all, says Vahey, the minister must do more to raise the profile of these issues: "We need people to get up to speed with what's happening, to give this the attention and significance it deserves."

Perhaps Rosie Winterton will be the minister who makes that breakthrough. But the one thing we do know is that, with a General Election due by mid-2010, she probably won't be breaking any records for the length of time spent in the post. If there’s one thing most commentators would like to say to her in the way of a welcoming message, then it would be ‘good luck’. Clearly, she’s going to need it.

- Pensions Age November 2008