Will the Tories be more grown up than Labour?

5 March, 2010

If the Conservative party wins the general election, can the pensions industry expect more of a grown up debate on retirement savings?

The answer, if this week in politics is anything to go by, is ‘no’. In a surprise move, on Wednesday the Tories voted against the parliamentary bill setting out the framework for auto-enrolment. The bill still went through – due to Labour’s majority in the House of Commons – but it so irked the Department of Work and Pensions that a press release was issued announcing ‘Tories vote against pensions for millions'.

Was the Tory stand-off a much needed complaint against the scope and complexity of auto-enrolment, views which many experts in the pension industry will share? Or was it a fit of pique over the contract signed earlier in the week with Tata Consultancy Services, the Indian firm now set to administer NEST?

Pensions minister Angela Eagle left little room for doubt of her views. “I am astonished that the Tories have thrown their toys out of the pram just when the prize of pension saving for millions of people on low and medium earnings is in sight,” she said.

The Conservative party officially claim their refusal to support the parliamentary bill stems from a dissatisfaction with the extended timescales of auto-enrolment, leaving those in most need of pensions saving out of the loop until 2017.

But shadow pensions minister Nigel Waterson has admitted he was “frustrated and angry” and felt “shabbily treated” because he had not been given prior warning that the Tata contract was going to be signed. “We do not want to be put in a position of having to break contracts,” he told a pensions industry seminar this morning. “We find the fact that the Government is pushing on without any consensus just weeks before a General Election is just extraordinary,” accusing Labour of implementing a “scorched earth” policy.

The Tories may be genuinely unhappy with some details of pensions reform, and they are also right to question a bidding process in which all but one contender ruled themselves out. But they are more annoyed that the so-called cross-party consensus has not given them greater influence over pensions reform, and seem overly keen to stamp their mark on the project instead of focusing on making it better.

Cue the political point scoring. “These reforms, supported by the CBI and the British Chambers of Commerce amongst others, will give millions of working people vital pension support for the first time - the most radical reforms for working people since the introduction of the national minimum wage,” pontificated Yvette Cooper, secretary of state for work and pensions. “Now we know the Tories want to kick people in the teeth and take that pension promise away.”

Too much has been said and written already about the need for more than a luke-warm political consensus over pensions reform. If it is too important to be left in the hands of squabbling politicians, it is about time an independent commission took the reins, and charted a proper long-term course. We may hope that the Conservatives will take the problem more seriously should they win a majority. But once in office with hundreds of more urgent and headline-grabbling policies to roll out, what are the chances that a proper review of retirement savings in this country gets lost deep in the bowels of Whitehall?