Harrington: Treasury and DWP now closer on pensions

Richard HarringtonThe new pensions under-secretary of state’s close ties with David Gauke and Simon Kirby will lead to a more collaborative relationship between the Department for Work and Pensions and the Treasury, Richard Harrington told the PLSA conference.

Speaking at the PLSA conference in Liverpool yesterday, Harrington said the fact that economic secretary to the Treasury Kirby and chief secretary to the Treasury Gauke are personal friends of his means the tone of the relationship between Treasury and DWP will be less strained than it was when his two predecessors, Baroness Altmann and Steve Webb were in office. Both his predecessors were not long-term Conservative Party members and both their periods in office saw rumours of divisions between DWP and Treasury on key issues.

Harrington outlined the roots of his long relationships with the Prime Minister and with DWP secretary of state Damian Green, as well as Gauke, with whom he has worked on local issues as a result of their constituencies being adjacent to each other.

He used his speech to confirm his commitment to auto-enrolment and said his job was to deal with marketing pensions to the millions of new AE savers, although he stressed a focus on ‘long-term savings’ rather than ‘pensions’ when communicating with the public.

He also said that as well as the Pension Schemes Bill laid before Parliament today, which would strengthen master trusts and give TPR new powers, there would also be a forthcoming green paper on DB pensions that would look at all options, including whether consolidation similar to that achieved in the LGPS could be achieved more widely, to permit economies of scale and more investment in infrastructure. This, he said, could be done by Government nudges.

Harrington said: “I often get people saying ‘he’s here doing Theresa May’s dirty work’, or ‘he’s a stooge of this person’ or ‘he’s a non-entity’. I do have an immediate advantage over my two immediate predecessors in that it so happens that the key ministers at the Treasury happen to be good personal friends of mine. And I think sometimes personal relationships help a lot. I have found this in some of the things I have done over the last four weeks with (economic secretary to the Treasury) Simon Kirby and (chief secretary to the Treasury) David Gauke. I like to think it helps the relationship.

“I’m not the crony of anyone. I know Theresa May quite well, she was at university with me and I served under her at the Home Office. I happen to know Damian Green well because he signed me up at freshers’ fair about 40 years ago. I was asked to be at the DWP and I rang up Damian and said ‘can I have pensions’ and he said fine. I asked for this and I am glad to be doing it.

“Government is cockahoop about how well auto-enrolment has gone. The drop-out rate is lower than expected. But the hard stuff is to come. We have a lot of marketing to do to explain to people that this is the right product for them. Ironically I am not concerned about the companies – it’s the law, and they will comply… Of course people are confused (by pensions). We have got to get across the message that this is your long term savings. Pension isn’t something they think of. They don’t see it like they see a car or a house. Our job is to show them that ‘this is your own account’. You have your own money… the Government helps you and your employer does’. Do people understand what tax relief is? It’s your money – we have to keep pushing that message.”