The appointment of Emma Reynolds as the UK’s parliamentary secretary across both the Treasury and the Department for Work and Pensions (DWP) has ignited hope for a joint-up approach to pensions policy.
Gregg McClymont, executive director at IFM Investors and former shadow minister of state for pensions, said the appointment suggests “how serious” the new government is about finding ways to unlock potential investment in the UK economy and unlisted assets in particular.
At present, many areas of pension policy are split between the DWP and HM Treasury.
He pointed out that across government there is “always a big challenge” with issues that cut across departmental boundaries and there’s always a “danger of silos”.
He said: “The joint appointment is very sensible in terms of making sure that what is a cross-departmental issue is handled cross-departmentally.”
He believes that the Labour Party might want to build bigger pension funds across the sector with scale and the expertise to “naturally invest” in unlisted assets as part of prudent risk diversification.
He said: “If the UK take serious steps to build a series of large pension funds, then those funds can work better for members because scale matters in pensions. It will drive down administration costs, but also, they’ll be able to hire the expertise to be global investors.”
He said that this way, the agenda can work to “everyone’s benefit”.
Steve Webb, partner at LCP and former pensions minister, agreed that the appointment could lead to a more “joined up” pension policy approach.
He said that in the past, the two departments have not always worked together when it came to pensions policy, with Treasury changes to pension tax relief sometimes undermining DWP efforts to boost pension saving.
“With a combined appointment there is the opportunity for decisions on pensions to take full account of the whole pensions landscape,” he noted.
However, he warned that one risk is that the Treasury’s desire to see pension assets used to promote economic growth at a macro level could mean that the individual member perspective gets less attention than it should.
He said: “This is something the new minister will have to guard against.”
Further appointments
As well as appointing Reynolds across DWP and HM Treasury, Labour has also appointed Andrew Western and Maeve Sherlock as parliamentary under-secretaries of State at DWP.
With the former pensions ministers holding the title of parliamentary under-secretary of state at DWP, either Western or Sherlock could be handed the responsibility. However, the DWP has not yet confirmed the responsibilities for the new appointees.
These are in addition to Liz Kendall being appointed as the new secretary of state for work and pensions at the DWP, as well as both Alison McGovern and Stephen Timms being appointed as ministers of state in the DWP earlier in the week.
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