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Monday, 25 July 2016

PENSIONS MINISTER DEMOTED

The new Minister for Pensions - as he will be called - was demoted before he even began his job.

Richard Harrington the MP for Watford was appointed to his post on Monday 18 July after the dismissal of his predecessor Baroness Altmann late the previous Friday.

Lady Altmann was a Minister of State, second in the ministerial pecking order below the Secretary of State and above the lowest rank of Parliamentary Under-Secretary. But Mr Harrington was put in that lowest rank. Above him are three Ministers of State - one for Employment, one for Disabled People, Work, and Health, and one for Welfare Reform - and the Secretary of State Damian Green. The only other Parliamentary Under-Secretary Caroline Nokes is Minister for Welfare Delivery, junior to the Minister of State for Welfare Reform.

Steve Webb, the previous Pensions Minister but one, was clear what this meant.

“an Undersecretary of State is junior to a Minister of State so it is a demotion for pensions. The seniority of ministers really does matter, not least in dealings with other government departments such as the Treasury. This…demotion for pensions sends a worrying signal.”

It is not just seniority Mr Harrington has lost. As a Minister of State in the Commons he would have been paid £9,305 a year more than he is as an Under-Secretary. He won't be poor. His total pay as an MP and a Minister will total £90,397. But that is 9% less than the £99,702 paid to his Minister of State colleagues in the House of Commons.

Lady Altmann has made it clear in newspaper articles and radio interviews since she left Government how tough it was for her even as a Minister of State to get her voice heard, still less effect any real policy change. An Under-Secretary will face an even bigger challenge.

But perhaps it doesn't matter. Unlike his two predecessors Mr Harrington has no apparent background in pensions or indeed social policy. I understand his job will be to continue with the implementation of existing policies rather than to introduce anything new or radical. A spokeswoman told me

"Pensions remain a key priority for the Government and the important work to bring in the new State Pension, roll-out automatic enrolment and safeguard the pension freedoms will continue under our new Minister for Pensions."

No date could be given for the new Pensions Bill which would make important changes to protect consumers, increase their freedom, and provide new ways to give them advice and guidance. But "it remains a priority and is expected in the Autumn". New Pensions Bill see p.30

On his appointment Richard Harrington is quoted as saying

"I am delighted to take responsibility for this important ministerial post, and I look forward to tackling the full range of state and private pension matters, including the new Bill and automatic enrolment, among so many others."

That will keep him busy.

Footnote: Under the three Labour governments 1997-2010 Pensions Ministers lasted in post on average for 14 months (426 days). The Coalition government benefited from having one Pensions Minister for its full five year term. Baroness Altmann also lasted in her job just 14 months (431 days). 

Footnote 2: The previous Pensions Minister, Baroness Altmann, was a member of the House of Lords. Ministers of State in the Lords receive the standard Minister of State pay in the House of Lords of £78,891 which has been frozen at that level since 2011. Peers do not get MP’s pay and Ministers are not allowed to claim the standard £300 per day for turning up which applies to other Lords. So in total the new Minister gets more than his predecessor, though the bulk of that for being an MP (£74,962) not a Minister (£15,435). See Minimum Wage Ministers.

Version 1.10
25 July 2016