'Don't leave small firms out of auto-enrolment'

30 September 2010 12:00 pm | By Nicole Blackmore

Shadow pensions minister Angela Eagle has warned that if auto-enrolment excludes some small businesses the labour market will restructure to avoid paying Nest contributions.

Speaking at a Labour conference fringe event in Manchester this week, Eagle said Nest must go ahead and small to medium enterprises must be included in the scope of the scheme.

She said: “If we get to the stage where we are excluding some SMEs from Nest then the labour market will simply restructure itself to avoid paying Nest contributions. It is important to include small businesses in the scheme and we have to find a way of doing that which is not too complicated.”

Eagle says she is pleased by leaks suggesting the Government is planning to keep Nest following its review of pension reforms and the comprehensive spending review. She said: “One hears things that are leaked which are encouraging, so let’s hope the Government does not lose its nerve at the last hurdle.”

National Association of Pension Funds chief executive Joanne Segars said there is a strong consensus for keeping Nest and any changes now would cause significant delays to pension reforms.

She said: “I see a strong consensus for keeping Nest and auto-enrolment and I have not seen a huge appetite from the industry to come up with an alternative. If we start to chip away at the reforms now, it will set us back years. There is a consensus that we need to get on with it.

“It is important that we do not think of 2012 as the end of the road, it is just the start of the journey.”

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