The quiet revolutionary

Posted On: 
12th September 2013

Pensions Minister Steve Webb feels vindicated by the revolution he’s helped bring about in British state pensions – even if, in his own words, ‘nobody has noticed’

Not for the first time since 2010, there’s a demonstration outside the Department for Work and Pensions. And not for the first time, Steve Webb and other ministers have to use the ‘tradesman’s entrance’ to get in and out of the building.

As a group of disabled protestors chants slogans from loud hailers and portable amplifiers, railing against Atos, benefits cuts and the Coalition in general, the Pensions Minister remains sanguine about yet another DWP flashmob. “There’s always something…because we engage with about 20 million of the population,” he says.

Yet although Webb accepts the legitimacy of the protest, he is as resolute as anyone in Government about the need for change. And, in an echo of his boss Iain Duncan Smith, it seems the quiet man of welfare reform is turning up the volume.

IDS and Webb are seen by some colleagues as the Batman and Robin of the Coalition’s far-reaching overhaul of benefits and pensions, one of the biggest tickets of Whitehall spending.

Webb is full of praise for his Secretary of State. “I think because of Coalition there has been give and take, but I’ve worked within this Department very closely with Iain Duncan Smith. I think a lot of the stuff he’s doing on working age stuff is stuff Lib Dems can be very comfortable with and he’s been very supportive of the things I’ve tried to do on the pensions side. And they’ve complemented each other.”

Three years in post, and expected to remain there for the whole Parliament, Webb also stresses the length of their partnership is one key reason for progress. “We’ve had tremendous stability. I won’t take you to the ministerial loo but when you go to the ministerial loo, you walk past some photos on the wall and on the wall on one side are the Permanent Secretaries over the years. And there are three. On the other side are Secretaries of State, and there are about 10. And you start to realise that ministers just come and go, come and go,” he says.

“And that just means you can’t see anything through, you can’t deliver things, and of course your officials have it over on you because they know you’ll be gone in 13 months on average. So I think the continuity we’ve had in this Parliament has been a real plus: the fact that Iain has been able to see stuff though, you go through cycles, CSRs, Budgets together.”

Of course, Webb is Professor Steve Webb, a former academic and IFS researcher with a lifelong passion for welfare reform. Although few of the public may recognise him in the street, he is behind change that is affecting tens of millions of Britons, for years to come.

How does it feel to finally turn theory into reality? “For a Liberal Democrat who has talked about this stuff for decades, to actually put it into practice and to actually see the legislation through Parliament is tremendously rewarding. And rewarding for our members. They’ve had to sit and listen to me make speeches at conference about this stuff for years. You know ‘I agree with that, but it isn’t happening is it?’ Well, now it’s happening.

“In Opposition I’ve argued for a better state pension for women, simplification, less means testing and all of that and that helps to shape debate and influences perhaps at the margins, but to actually be within Government, to stand up at the end of the Second Reading and say ‘I commend this Bill to the House’ and have two political parties cheering for it and indeed the Labour Party not opposing it either – is satisfying.”

Webb is the brains behind not just the ‘triple lock’ guarantee of a higher pension but also a single-tier system and the auto-enrolment of employees into workplace schemes. Pensions were for years seen as boring (“How dare you?” he jokes) but are now a very hot topic. Does he find that rewarding?

“Yes, The automatic enrolment is the classic example of that. The TV advertising campaign we had, the ‘I’m in’ campaign, with Nick Hewer, Karren Brady, Theo Paphitis and all of that, I now go to conferences and ask who’s seen our advert and everybody sticks their hands up. And the fantastic vote of confidence is that nine out of ten people who have been enrolled have stayed in. We thought it might be a third opting out.

“It started in earnest last October. We’ve already got over a million people into pension saving who this time last year didn’t have a pension. I call this a quiet revolution because nobody has noticed.”

Webb is evangelical about telling youngsters to treat their retirement seriously. “It is clear that generations to come will have to stand on their own two feet more. There will be a state pension, it will be a decent floor – but it will only ever be a floor. And so what we are saying to the twenty- and thirty-somethings is ‘let’s get you starting saving, even at a modest level, early.’

“Because in a world where there’s 50% more pensioners, you can’t just hope that a future Government will honour a large state pension to ever more pensioners. It ain’t gonna happen.”

But does he have any sympathy for children, like his own teenagers, who are facing not just years of tuition fee debt but also new pension payments from the start of their working lives?

“There’s a limit to what one can do to address those sorts of things. When you have got nine workers to every pensioner, you can have pretty generous pensions. When you’ve got two workers to every pensioner, it just ain’t gonna hold. So the demographic pressures are such that unless we expect future generations of workers to have very, very high tax burdens, then people have clearly got to make more provision for themselves. So yes there is a switch between generations.

“On the other hand generations like ours, to the extent that we’ve done well out of the system, our kids will benefit. So within the generations there is difference between people whose parents have done well out of the system and that will cascade down, for want of a better phrase, and the folk who come from more disadvantaged backgrounds – and that’s where the party and the fairer society theme comes in, and is looking at social mobility, the pupil premium and all of that to try and help people break out of being locked in.”

Webb is acutely aware of the inter-generational differences but makes clear he is not a grey vote basher either. “I’m always very hostile to the sort of ‘older people are a burden’ stuff. If you think about the mid-50s to the early-70s, that kind of group, who are generally on average physically active, many of them have got occupational pensions, if you think what they are contributing, they are the volunteers, they are the carers, they are the people who make things happen. And they have put in through their lives. You can’t look at it in cross-section, you’ve got to look at their whole lives. They’ve contributed massively, you can’t then just say well it’s not fair, that the youngsters are having a hard time so you can have a hard time now.”

He adds that companies which keep skilled, experienced, high quality older workers in the labour market, their business does well and they are more productive “and that helps young people”. In what sounded like a gentle jibe at David Willetts and his book The Pinch: How Baby Boomers Stole Their Children’s Future, he adds: “I’m very wary. You can sell a book by saying there’s a war between the generations but I actually see complementarity. Keep the skills of older workers, I don’t see that as a barrier to young people, they can work together.”

He’s not as gung-ho as some on the need to slash ‘welfare for the wealthy’, the party leadership’s slogan to attack pensioner benefits.

“With all these pensioner benefits we need to take them one at a time and look at what each one is doing, who gets it. I don’t think a blanket approach would be the right one….But Nick’s absolutely right, we’ve had to take some tough decisions on people of working age, we can’t just say that things like winter fuel payments to high earners will carry on as they are. Nick has set out a direction of travel but in terms of the detailed options we are still working our way through.”

Webb made his name as a Lib Dem whose heart beats on the left and seems very useful to the leadership in reassuring the rank and file. “The party knows where my instincts are and I don’t think they are out of line with the party as a whole really. We’ve accepted we have to make savings but wherever possible we’ve tried to protect the most vulnerable – at every turn. Take the benefit cap, we’ve exempted disabled people’s benefits.”

But despite his credentials on caring about the disadvantaged, or maybe because of them, Webb is not impressed with Labour’s own recent conversion to the merits of curbing some benefits for the elderly. “It’s very tokenistic,” he says.

When asked if there is any common ground between himself and Liam Byrne, the minister gives a derisory snort of laughter. “They have opportunistically opposed every penny of welfare savings. With virtually every one, an outraged letter campaign, stuff in the press and then one day they say right our starting point for the next Parliament is your spending plan, thereby embodying everything we’ve done. Oppositions can be opportunistic but it’s so outrageous.” He adds that facing Byrne across the Despatch Box is “like facing a vacuum”.

One area where the left of the Lib Dems want action this conference is on Nick Clegg’s motion on the economy. The Social Liberal Forum tabled amendments which included a call for the removal of all council borrowing limits in order to build at least 50,000 more social homes per year. Did that appeal to him?

“Yeah. I haven’t seen the details so I can’t say specifically, but broadly that’s something we would be sympathetic to. I spoke at the Social Liberal Forum conference a few months ago and I’m probably one of the founders of the Social Liberal Forum so I think it’s great that they are engaging with the economy motion. I think a lot of what they are trying to add to the motion is improving it.”

Webb has also been busy promoting a new book by fellow Christians in the party, provocatively titled Liberal Democrats Do God. The foreword he wrote prompted a few newspaper headlines. “All I was saying essentially was that if you believe the Christian Gospel, you believe that freedom really matters. It’s about freedom of choice, it’s not about being forced to do things. And therefore that’s a natural fit for people like us.

“I work very closely with Christian colleagues in other parties but I feel as a Christian very at home in the Liberal Democrats. I feel the faith values and the political values mesh very well and we haven’t always given that impression. Because we are a…I was going to say a secular party but that’s not the right word, but we certainly wouldn’t want to discriminate on faith grounds and give faith an unduly privileged position, that’s sometimes been understood by people as being hostile to faith. And part of what we are trying to do is say that’s not where we are.”

If the CofE used to be ‘the Tory party at prayer’, perhaps Methodism is ‘the Lib Dems at prayer’? “Absolutely, if you think of the geographical areas where we’ve historically been strong, yes. They say disciplining Liberals is like herding sheep, non-conformism is in our veins really.”

And the minister is unafraid of being loud and proud about his own faith. “Just as if you are a passionate socialist or humanist or whatever, you just don’t disentangle all those things and then do your job. It’s part of who you are, your values, your lifestyle, your priorities. I don’t expect people who don’t come from my faith background to accept my faith justifications for things, I have to have other reasons to persuade them. These are some of the things that get me out of bed in the morning. Why does the ‘fairer society’ theme strike a chord with me? That’s my kind of bias to the poor if you like.”

Would Jesus approve of the Universal Credit, or the ‘bedroom tax’? “I’m not going as far as to say those things,” he laughs.

Given the state of the Lib Dems in the opinion polls some kind of divine intervention is the party’s only hope of avoiding disaster in 2015. But Webb is, again, sanguine.

“I’ve been an MP for 16 years and in the party a bit longer than that, and that does give you slightly the longer perspective on things. If you’re brand new and you’ve never seen single-digit poll ratings before of course you’d rather the polls were better than they are. But I’ve seen us recover from worse than this and incumbency is important. We’ve got a lot of work to do and we know we’ve got to get our message across and in Coalition it’s a unique challenge to be distinctive. It ain’t going to be easy, but I think morale is remarkably good,” he says.

“The Lib Dems have a cliché that says ‘where you work, you win’. That’s absolutely true. People will still vote for me and my colleagues because they can see what we do for them, but we’ve got to tell them. And we’ve got a lot of hard work to do.”

Webb on…preparing for retirement

 “I often say, if I tell a twenty year old what their pension age will be, I’ll be lying. It’s very hard to say because the longevity improvements happen pretty suddenly.”

Webb on…Labour

“I certainly think the current leadership, Miliband and Balls and Yvette Cooper, is very much rooted in the Brownite view of the world. The world has moved on.”

Webb on …Nick Clegg’s infamous ‘I can’t stand him’ remark

“I can’t remember what you are talking about… I think that’s water under the bridge. We get on very well.”

Webb on ..doing God

“What I say in the foreword is God is a liberal, not a Liberal Democrat. I haven’t checked the membership survey, but you’ll appreciate the distinction.”