First published in Professional Pensions, 22 June 2017
The role should be scrapped as pensions are too important to mess with.
So it's official. Richard Harrington was moved off the pensions brief after just 11 months. We then had a void for a week or two before finally, Guy Opperman was named as the new chap - albeit with an apparently extended (diluted?) brief to include financial inclusion. I welcome him and wish him luck. The cynic in me, however, also wonders how long it will be before I welcome and wish luck to his replacement.
Opperman is the 30th holder of the role. Here are a few facts:
- The role has existed twice, between 1916 and 1954 and since 1998
- In the first iteration there were 15 holders of the role - one man holding it twice, another three times (see below). The average tenure was two years.
- In the second iteration there have also been 15 holders - one, Stephen Timms, holding it twice. The average tenure being 14 months.
- Aside from Opperman (give him a chance) John Denholm holds the record for the shortest tenure - just five months.
- Contrary to popular belief Sir Steve Webb (five years) does not hold the record for the longest tenure. Sir Walter Wormesley possibly does (six years one month) although, depending on how you want to do this, he may have been eclipsed by George Tyron (nine years and four months) although he achieved that total over three postings to the job.
And my point? Well if there is one, it is this.
Pensions are vital to the social welfare infrastructure. Age is an immutable fact of life that can only be avoided one way. As we age we become less physically and mentally able to work because our faculties decline over time. A few people will work until they drop - through choice or necessity - but most of us won't. In other words, most of us will face, at some point or another, unless we go for the other option, retirement and a feature of retirement, a defining one, is that we stop selling our labour for money.
The consequences of not selling our labour are potentially catastrophic: poverty, destitution, disease and a cold, wet, miserable life. There are, however, mitigating factors. In days gone by, the old were cared for by their families although, as life expectancy and healthcare costs increased, this became less tenable. The advent of a robust universal state pension 109 years ago may also have rendered the strategy unnecessary.
The modern mitigation is a three-pillar pension system: pillar one - a standardised basic state pension primarily aimed at substantially eliminating old age poverty; pillar two - a pre-funded, perhaps incentivised, workplace pension; and pillar three - private savings, investments and other assets.
In other words, absent a caring family, pensions are vital to avoiding mass old age poverty; vital to avoid old men and women sleeping on the streets and/or clogging up hospitals; vital to avoid them having to beg for money or pick food from bins.
And yet, the average tenure of a modern pensions minister is just 14 months. This may be because the prime minister of the relevant day saw talent they wanted deployed elsewhere or it may be because the incumbent of the day saw more opportunity elsewhere. Who knows? All I know is that the brief - the function - is too important to mess with.
Here's a thought. Why not scrap the role? Get rid of it. No one (Steve, present company accepted) wants the job anyway - in government terms it's lowly (even more so now), it's relatively powerless and it puts you at odds with the mighty Treasury. Instead let's have a permanent standing pension commission charged with creating and maintaining a long-term, stable, sustainable pension system. That would be one for the record books.