Examination of witnesses (Questions 320
- 326)
WEDNESDAY 10 NOVEMBER 1999
MR CHRIS
DAYKIN CB, MR
ANDREW YOUNG
and MR DAVID
LEWIS
320. Finally, what impact will the Government's
Green Paper on pension reform have on the fund, if any?
(Mr Daykin) The ones which have not been dealt with
in the Welfare Reform Bill?
321. Yes.
(Mr Daykin) A significant impact in terms of the structure
of SERPS if that is replaced by a second state pension. It is
difficult to say at this stage precisely because it depends on
what the policy is, when it is placed in a Bill, but there will
be some significant changes to the earnings related part of the
long-term cost.
322. So it is really too early to say in any
detail, is it?
(Mr Daykin) I think so. That is partly why the Green
Paper itself did not have any estimate, because the policy is
still not sufficiently precisely determined in the Green Paper
to say what the cost would be. By the time it comes to the Bill
it will need to be laid out in sufficient detail for us to be
able to provide a financial memorandum.
323. Maybe when it is in the financial memorandum
you will be able to indicate at least ball-park figures.
(Mr Daykin) Yes.
324. What is the extent of your independence
in all of this because I know you have quite strong views about
SERPS and some of the policy issues? Supposing you did actually
feel in your heart of hearts the Government were doing things
that were inimical to the National Insurance Fund as you saw it
and you have got a role to protect and develop, would you have
the ability publicly to say, "I think that the Government
are doing this the wrong way"?
(Mr Daykin) That is a very difficult question to answer.
I have independence professionally in terms of the advice that
I give and independence professionally means that you do have
the ability to widen the scope of the questions which are put
to you. So I would feel free in a quinquennial review, for example,
to raise issues which seem to me to flow directly from the current
position without having specifically been asked that question,
such as the way in which we present within the quinquennial review
the other side of the coin of this financial stability which is
the percentage of earnings which people will be getting by way
of the award of a pension thirty years from now, which to my mind
is important in terms of explaining what is going on. It is not
specifically something that I am required to do. When it comes
to criticising Government policy, I do not think that is the role
of the Government Actuary and I would be very hesitant to criticise
in areas of policy which are for politicians. I think my role
as Government Actuary is to look at the consequences and to explain
those and make sure that they are in the public domain so that
everybody has good access to that sort of information which will
help to inform good policy making.
325. But privately you have got the opportunity,
if you think the Government are going in the wrong direction,
to say you are not too sure about this?
(Mr Daykin) I can flag up issues which I think are
important and I have been quite open in talking about the balance
between funding and not having funding because those are issues
which are very heavily debated in the actuarial profession and
outside and where I do not have any hesitation in making my view
felt which I do not think commits the Government in any way at
all.
326. That has been very helpful evidence. Keep
up the good work. We look forward to your next quinquennial review.
Thank you very much for your attendance.
(Mr Daykin) Thank you very much.
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