Ex-pensions minister Steve Webb has
argued that the financial services sector
will see no “benign stability” during the
next parliament because the
government’s focus will be on cutting
Webb, a former Liberal Democrat MP who
currently works as director of policy for
Royal London, argued that outside the
mammoth task of disentangling the UK
from the European Union (EU) the
government’s main objective will be to cut
costs in light of a stalling economy.
He said: “Although Chancellor Osborne
has admitted the government will not be
able to balance the books as it had hoped
to by 2019, it still faces an enormous
current account deficit and must focus on
deficit reduction, anything else will be way
down on the list of priorities.”
He explained that officials and lawyers in
all government departments will be
consumed with the enormous task of
separating EU from English law over the
next few years and so will have little time
to focus on much else.
Webb argued that as a result any changes
to the financial services sector will be ad-
hoc and made to save money. They are
likely to include changes to pension tax
relief .
“Expect to see a reduction in the lifetime
or annual allowance,” he said.
Similarly, the government will have little
time to solve problems that urgently need
addressing, he argued.
Those most in urgent need of attention
might include the fact that 8% is too low a
threshold for auto-enrolment
contributions, and that 4.5% of the
population are self-employed and
excluded from the scheme altogether.
Another big issue is the significant advice
gap. “There simply won’t be the
legislative space to address these
problems,” he said.
However, Webb concluded on a high note.
“One good thing is that legislation already
in the pipeline will probably be passed.
The government will probably continue
with its work on the Finance Bill, the
Pensions Bill and rules around the
Lifetime ISA,” he said.
“The government needs to be seen to be
doing something, they won’t want to
appear to be completely dominated by
Brexit and so will be unlikely to drop
initiatives that have been worked on