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Verity&#39s view

In the recent Cabinet reshuffle, the old Secretary of State for Work and Pensions Alistair Darling was welcomed in his new job at transport as “a safe pair of hands”.

Unfortunately, this hackneyed phrase is one of those which emerges from the political world on those rare occasions when the records of Cabinet ministers become worth discussing.

Political correspondents tend to write up a politician&#39s record in a terrible hurry on days like this. In many cases, they will, for months or years, have paid very little attention to the minister in question because he or she lacks the political prominence of, say, a Blair, a Brown or a Prescott.

If, when the political correspondent looks through the cuttings, there is no record of any spectacular mishaps, it makes it harder to call the politician controversial.

If there is any personal scandal, it might be possible to use the word colourful. But without that, the politician will inevitably end up earning what in politics is a much coveted moniker that can win you promotion – safe pair of hands.

The trouble is that winning that title is more to do with just that – the absence of a negative – than with its opposite, the presence of a positive. So long as you do not fail spectacularly, you need not achieve very much at all.

Those who have to watch a minister more closely will tell a different story. Darling, most in the financial services industry seem to agree, is perfectly all right as a man. Got to know his brief very well. But what you really want in a minister – especially one in charge of pensions in times like these – is something quite different from a safe pair of hands.

You want someone who can achieve the changes that are so desperately needed. What has Darling actually achieved? Has he, for example, implemented Government policy? The stated aim is to reverse the situation where 60 per cent of pension provision is from the state and 40 per cent from the private sector. Success? Not even a little bit.

The ditching of final-salary pension schemes in favour of money-purchase and, more to the point, the cutting of the amount that employers contribute, has sharply diminished the amount of private sector pension provision.

In fact, under Darling, there has been a sharp switching of pension provision in the other direction, from the private sector back to the state. The introduction of, first, the minimum income guarantee and now the pension credit has been laudable in the sense that it has done more than any other Government in decades to relieve pensioner poverty (at least, for those who take up these benefits).

But it is done so at the cost of directly undermining the incentive to save into private pensions. Another policy was to extend that private pension provision to those with the average income or slightly below, with stakeholder pensions. Success? Not much. By making it a legal obligation, the Government has forced plenty of employers to “designate” a stakeholder pension.

But in practice, as we now know, this typically means having a Standard Life/Prudential/Norwich Union policy pack sitting uselessly on the shelf in the manager&#39s office. It does not mean anyone saves anything more. Or again, Darling&#39s own “big idea” was to give everyone an annual statement saying what they could expect from all their state and private pension arrangements. A pilot scheme went ahead.

But even this seemingly modest and sensible ambition proved futile. Because of data protection, employers could not get access to details of an employee&#39s other pension savings outside the employer&#39s scheme. All they could do was say what employees could expect from the employer&#39s scheme and from the state. Talk of a “full” pension statement giving us all a big picture of what we can expect at retirement has gone distinctly quiet.

But it seems unfair to blame Darling. The truth of this Government is that a Secretary of State for Work and Pensions has very little power. It is the Chancellor Gordon Brown who has reshaped the welfare system around the tax system, using tax credits to relieve pov erty among low-paid workers.

It was Gordon Brown who undermined final-salary pensions by withdrawing dividend tax credits. It was Brown who reduced the incentive to save by deciding to use meanstested benefits rather than an uprating of the basic state pension, to relieve pensioner poverty. It is Brown&#39s Treasury, and the Treasury alone, which is once again undermining private pensions by offering paltry contractingout rebates to company and personal pensions.

Notably, Darling was well known as Gordon&#39s ally. His previous job was as chief secretary to the Treasury. The new incumbent, Andrew Smith, also known as a Brown man, comes from exactly the same post. For the sake of his political record, he had better hope that his old mentor will allow him to look just a bit more effective than his predecessor.

Andrew Verity is personal finance correspondent at the BBC


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