This week I want to tell you about my good friend and colleague, Professor Steve Webb.
Steve is the Liberal Democrat MP for Thornbury and Yate, north west of Bristol. There are two things you will know about Steve if you have ever heard him speak. First: he is originally from Birmingham. Second: he is incredibly clever and understands more about pensions than almost anyone else in the country.
A former professor of social policy at Bath University, Steve’s CV includes a stint designing a new pensions system for the Ukraine after the fall of Communism and nearly ten years at the Institute for Fiscal Studies analysing taxes, benefits and pension policy in the minutest of detail.
So you can imagine how I felt, back in May 2010, when I got to appoint Steve as Minister for Pensions in the Coalition Government. It felt like serendipity. There simply couldn’t be a better person in the country to do the job.
And it wasn’t exactly a big surprise when, only a month or so later, Steve came back to say, with a glint in his eye: “I’ve got a plan. Let’s completely redesign the state pension.”
If anyone else said that to you it might be alarming. But from Steve, it was exciting. And after two and a half years that glint has turned into a concrete government proposal to introduce a new, simple basic state pension of £144 a week (up from £107), starting in 2017.
Until now, working out what pension you might be entitled to – and so, whether it was worth trying to save extra for your retirement – was a job for a professor alone. From now on, it will be easy for anyone who can count up to 35 (the number of years it will take to qualify in full) to work out what you’ll get in retirement. And it will be worth everyone’s while to save, because every pound in your private pension will be extra, with no more means testing.
The new system will be especially good for women, low earners and the self-employed, who can be sure of getting a decent pension instead of falling through the many cracks in the old rules.
So when people ask you, “What have the Lib Dems done for me in Government?”, you know what to tell them. You can tell them Vince Cable’s department is delivering more apprenticeships than ever before. You can tell them the Pupil Premium, an idea I wrote about in a pamphlet more 10 than years ago, is putting money into their local school. You can say we’re delivering in April the biggest ever rise in their tax free allowance: a tax cut of £600, a promise that has made it from the front page of our manifesto directly into millions of people’s pay packets.
And now you can tell them that Steve Webb has delivered a pension change that makes it worthwhile to save, and simple to prepare for retirement. It’s a great step forward, and it wouldn’t have happened without us – because it wouldn’t have happened without Steve.