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Work and pensions secretary Green faces pressing problems

Work and pensions secretary Green faces pressing problems

In her first full day as prime minister Theresa May made sweeping changes to the cabinet which saw Stephen Crabb resign as work and pensions secretary, replaced by Damian Green.

While the person occupying the role over the last few years delegated much of the pensions policy detail to the more junior minister of state for pensions - Steve Webb in the coalition and Ros Altmann in the Conservative government so far - Green will have overall responsibility for this brief and final say on major issues.

So what will be the key pensions challenges for Green, and what do we know about his background?

Key challenges

Green straight away tweeted his delight at making the position: 

However, there are a number of issues where pressure has been gradually building and which present an enormous challenge for Green.

1. State pension

The state pension age issue came to a head last month when around 2,000 campaigners marched on parliament in support of the Women Against State Pension Inequality (Waspi) campaign. Waspi was set up last year to demand ‘transitional arrangements’ for women born in the 1950s affected by the acceleration of state pension age rises.

After the demonstration the leaders of the movement met with pensions minister Ros Altmann, who echoed her line that she does not have the budget available to provide transitional arrangements. She has also raised the issue that because the policy was designed back in 1995, she is hard pressed to find new arguments to put before parliament.

The Waspi issue was one which Altmann clashed heavily with previous work and pensions secretary Iain Duncan Smith over, and following his resignation Altmann described him as 'exceptionally difficult' to work for. But despite past conflicts within Whitehall, finding a new solution to the Waspi issue becomes ever more unlikely with every passing day, especially in light of the political upheaval of the past few weeks and apparent doubts over the future of the UK’s finances.

Green has immediately inherited a problem with little chance of resolution, but which has left thousands of people incensed. Yet he will also be under pressure to make the state pension less generous than it is, particularly as May has made overtures about providing more for people of working age.

2. Triple lock

Another key issue which has continued to rear its head is the sustainability of the triple lock on the state pension.

The triple lock has been one of the Conservative party’s key pension policies since it was introduced by the coalition government in April 2012. It ensures the value of the state pension will rise by the highest measure of inflation, wages, or 2.5%. At the start of this parliament the government pledged to continue with the policy.

However, it is something that has come under increased scrutiny given its huge taxpayer expense on the working age population.

Indeed Duncan Smith told the BBC after he stepped down that the government needs to rethink the triple lock on state pension rises to stop benefit cuts hitting only those of working age.

Then David Cameron warned ahead of the referendum that the triple lock would not be guaranteed if Britain voted to Leave.

A report from the Government Actuary's department last October said the policy cost the government an extra £6 billion a year and that costs could spiral further.

Now that George Osborne has exited, and along with him his dreams for a budget surplus by 2020, this perhaps relieves some of the short-term pressure on government spending cuts. However, in light of the economic uncertainty around 'Brexit' and the possible damages that this will inflict on tax revenues, this could also mean a review of the triple lock could once again be on the cards.

Of course if that does happen, it will mean those in or approaching retirement age will be outraged, even if this will perhaps be a move supported by the younger generation. So Green is very much between a rock and a hard place here.'

3. Auto-enrolment

No doubt one of the biggest developments in UK pension policy ever has been the introduction of auto-enrolment.

In his role, Green will immediately have to ensure that this programme accelerates and millions more employers make it into the programme. This means there are inevitably pressing challenges ahead and The Pensions Regulator (TPR) issued a warning in April that the number of companies failing to heed its warnings over auto-enrolment duties more than tripled in the first quarter of 2016.

Most employers who have already made it into auto-enrolment are the big ones; those to come are the small. This means the easier job has been done and the harder one is yet to be completed. And when one considers the worries over the lack of regulation over master trusts, and the bigger challenge of moving members from a 1% minimum contribution rate to 3% in 2018 and 5% in 2019, it looks like a tough climb indeed.

What do we know about Damian Green?

Damian Green is an experienced backbencher with a big job on his hands.

For although this apparent ‘nice guy’ of politics has taken an interest in pensions as a backbencher, his most recent ministerial work was at the Home Office and Ministry of Justice.

A former business journalist and editor, Green entered politics in 1992 to work for Conservative prime minister John Major’s policy unit in Downing Street. He left in 1994 to set up his own public affairs consultancy. Having unsuccessfully contested former Labour mayor of London Ken Livingstone’s Brent East constituency in 1992, he successfully took the Kent seat of Ashford in 1997 and has remained MP ever since.

Green held two shadow positions while the Conservatives were in opposition: he was shadow secretary of state for education and skills from 2001-2003 and shadow transport secretary between 2003 and 2004.

He then served briefly on the Treasury Select Committee between July 2004 and January 2006.

In 2008 Green was, somewhat controversially, arrested under suspicion of aiding and abetting misconduct in public affairs following a leak, but was never charged.

At the start of the coalition government in 2010, Green was made minister of state for immigration at the home office. At the 2012 reshuffle he was appointed minister of state for policing and criminal justice, a position held jointly between the Home Office and the Ministry for Justice. He was removed from that role in 2014.

Green’s record on pensions on the back benches is interesting.

In 2004 he voted in favour of the Pensions Bill, which introduced the Pension Protection Fund, and in 2010 he voted in favour of auto-enrolment and the establishment of the government-backed pension scheme the National Employment Savings Trust.

He voted in 2011 to accelerate a rise in the state pension age to 66, an issue which has been the thorn in the side of the Department for Work and Pensions, particularly since 2015.

The Waspi campaign was set up last year to demand ‘transitional arrangements’ for women affected by this short-notice legislative change, a plight Green has recognised since as a back bencher.

In April this year he asked his predecessor Stephen Crabb to make a statement on the assessment made ‘of the adequacy and timeliness of information given to women born in the 1950s of changes to the age at which they become eligible for the state pension.’

However, in February this year he voted against a commons motion to demand transitional payments for the women affected.

This is just one of the issues that Green will now have to grapple with. At the top of his inbox will be the roll out of universal credit, the continuing success of the auto-enrolment programme he voted for, and the government’s review of the state pension age.

Considering former chancellor George Osborne’s penchant for radical pensions policy reform, he could also have his work cut out standing up to the Treasury, now under the control of Philip Hammond.

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