George Osborne: Patience running out on Iraq probe

Chancellor of the Exchequer George Osborne. Picture: PA

Standing in for David Cameron, who was in Italy, Mr Osborne received a gentle introduction in deputising for the the Prime Minister in his new role as First Secretary of State but delivered a tough message to Sir John Chilcot and pension companies.

SNP Westminster leader Angus Robertson raised concerns about reports that the Chilcot inquiry will be delayed another year despite already taking six years.

Mr Robertson said ministers have a “moral or political responsibility” to find out why the report keeps being delayed.

Mr Osborne said: “Where I agree with you is this - it has been a long time coming and people I think are running out of patience, they want to see that report.”

Reminding the House that it was the previous Labour government that delayed setting up the inquiry, he added: “I’d make a broader observation that of course there was a cross-party alliance between the Scottish Nationalists and the Conservative Party when we called for that inquiry to be set up earlier than it actually was.

“If it had been we’d have the conclusions now.”

He later revealed that the government is considering a cap on the amount savers are charged to withdraw money from their pensions.

Mr Osborne said there were “clearly concerns” that some companies are not doing enough to make the new freedoms, introduced earlier this year, available.

He told MPs: “The pensions freedoms we introduced in April deliver a fundamental Conservative principle that people who have worked hard and saved hard all their lives should be trusted with their own money.

“There are clearly concerns that some companies are not doing their part to make those freedoms available.

“We are investigating how to remove barriers and we are considering now a cap on charges. I’m asking the Financial Conduct Authority to investigate.

“People who have worked hard and saved hard deserve a better deal.”

He was responding to new Tory MP Nigel Huddleston, who asked: “Will you do all you can do to make sure that the industry lives up to its side of the bargain and delivers on those freedoms?”

Mr Osborne announced that some 60,000 people had already made use of the changes, transferring more than £1 billion out of pots.

The reforms mean savers can spend their pension as they like without facing large charges, although not all providers are yet offering all of the options, which include withdrawal of a lump sum.

TUC general secretary Frances O’Grady said pensions freedom was looking “increasingly like a botched DIY job”.

She added: “The Chancellor is attempting to shave a bit off here and add a bit there just to make his flagship policy work.

“There were plenty of warnings that rushing in these changes was unwise. We need genuine action to remove unfair fees and charges on all pensions. Piecemeal reform would just be letting savers down.

The Treasury will launch a consultation next month to ensure people are not charged excessive early exit penalties and are treated fairly when moving their pension to a company that offers them flexible options to access their savings.

It will look at a range of options for addressing the issue, including the imposition of a legislative cap on the charges for those aged 55 or over.

It will also consider how to make the process for transferring pensions from one scheme to another quicker and smoother, to help people to make use of the new freedoms.

Harriett Baldwin, Economic Secretary to the Treasury, has written to Martin Wheatley, chief executive of the FCA, to confirm it will gather information from providers.