Statecraft and incremental change: Explaining the success of pension reforms in the United Kingdom
| DOI | http://doi.org/10.1177/13691481211044655 |
| Published date | 01 November 2022 |
| Date | 01 November 2022 |
| Subject Matter | Original Articles |
https://doi.org/10.1177/13691481211044655
The British Journal of Politics and
International Relations
2022, Vol. 24(4) 649 –667
© The Author(s) 2021
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DOI: 10.1177/13691481211044655
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Statecraft and incremental
change: Explaining the success
of pension reforms in the
United Kingdom
Thomais Massala and Nick Pearce
Abstract
How were comprehensive pension reforms in the UK successfully developed, enacted and
implemented from 2002 to 2015, despite changes in government composition and the financial
crisis? Why were they not subject to policy conflict, electoral competition and policy reversal?
Drawing on actor-centred historical institutionalism and thirty interviews with key actors, we
demonstrate the critical role played by a limited number of politicians and policy entrepreneurs
and their ideas and agency. Institutional continuity with the Beveridgean policy legacies of the
pension system and the United Kingdom’s `growth regime’ enabled a coalition space to open up
for policy agreement. between the government and Opposition parties, and for partisan electoral
competition over the reforms to be `bracketed’. The incremental and interlocking nature of
the reform package reduced interest group opposition and enabled a centralisation of decision-
making power. A long-term timeframe for reform cemented the formation of an elite coalition and
buttressed political control. Cross-party support for the reform package, coupled with judicious
phasing of the implementation of auto-enrolment and fiscal reforms, enabled it to withstand
the impact of the financial crisis and the austerity that followed it, and to minimise opposition
among the critical electoral constituency of older voters. The dominance of the reform process
by political actors and policy entrepreneurs in the UK nonetheless came at a price, as institutional
continuity and incrementalism foreclosed alternative reforms. We demonstrate the importance
of political statecraft and policy entrepreneurship in the UK pensions’ reform process, but within
boundaries set by its institutional context.
Keywords
Beveridgean welfare state, elite coalition, historical institutionalism, pension reforms, political
agency, Turner Pensions Commission, United Kingdom
Introduction
Since the 1980s, pension systems in many Organisation for Economic Co-operation and
Development (OECD) countries have undergone significant, often politically contentious
reforms. As Natali (2018: 53) argues, ‘Pension reforms are a risky process. Even when
reforms pass, their implementation is uncertain. Risks of partial or total reversal are
University of Bath, Bath, UK
Corresponding author:
Thomais Massala, Department for Social and Policy Sciences, University of Bath, Claverton Down, Bath,
BA2 7AY, UK.
Email: tm446@bath.ac.uk
1044655BPI0010.1177/13691481211044655The British Journal of Politics and International RelationsMassala and Pearce
research-article2021
Original Article
650 The British Journal of Politics and International Relations 24(4)
always present’. Policy consensus can weaken in the face of austerity fatigue, party politi-
cal change, policy instability and the fragility of reform agendas (Natali, 2018: 53). This
article addresses the puzzle as to why major pension reforms in the United Kingdom
proposed by the ‘Turner’ Pensions Commission in 2002 did not follow a similar trajectory
of policy conflict, party competition and policy reversal. Between 2002 and 2015, a series
of reforms to public and private pensions were successfully developed and then imple-
mented in the United Kingdom despite two general elections, changes in government
composition and political leadership, the exogenous shock of the 2008 financial crisis,
and the austerity enacted after 2010.
The reform package was a comprehensive one, involving interlocking measures for
both state and private pensions: (1) a more generous Basic State Pension (BSP) uprated
by a ‘triple-lock’ of the (highest of) average earnings, inflation or 2.5%, and the abolition
of the State Second Pension (S2P); (2) automatic enrolment into workplace private pen-
sions with the freedom to opt out; (3) the creation of a state-run defined contribution
scheme, the National Employment Savings Trust (NEST) mainly targeting low to medium
income earners and their employers; and (4) progressively stepped up increases in the
state pension age from 65 to 68.1 The reforms were substantial and involved distributional
trade-offs between social classes and age cohorts, yet at no point was the reform process
derailed by interest group conflict or political competition. The United Kingdom’s recent
history of pension reform therefore offers an interesting and under-examined case through
which to study the political dynamics of policy change.
The first section of the article sets out our theoretical approach. We briefly examine
existing accounts of the UK case, situating these in the context of the recent scholarly
literature on ‘growth regimes’ and welfare states in advanced capitalist economies which
give a central role to domestic consumption, financialisation and commodified welfare in
the growth models and economic strategies of the United Kingdom (Hassel and Palier,
2021). We postulate that the United Kingdom’s pension reforms were consistent with this
growth regime and the historical institutions of the welfare state, creating a space for
cross-party consensus to emerge on the reform trajectory, and for electoral competition,
particularly in respect of powerful older voters, to be ‘bracketed’ by political actors. In
turn, this enabled politicians and policy entrepreneurs to assume a central role in the
development and implementation of the reforms. We set out how historical institutionalist
perspectives on gradual reform – and the key concepts of ‘layering’ and temporality –
enable us to explain how these actors were critical to the puzzling success of the UK case.
We draw on ideational theories to examine the role of the key actors’ ideas in setting the
policy agenda and shaping the reform process.
The second section outlines our research methodology. The research is designed as a
single case study based on elite semi-structured interviews with key actors in the pensions
reform process. The article then proceeds to the main exposition of the research. We con-
clude with reflections on the relevance of our findings to the comparative study of pen-
sions reforms.
Institutional context, ideas and political agency
Hitherto, analyses of the United Kingdom’s pension reforms have largely focused on their
political-economic dimensions. Klitzke (2018) finds that the preferences of economic
interest groups were structured by the labour-capital cleavage, with trade unions opposed
to proposals for state pension age increases. Ebbinghaus (2019) argues that interest groups
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