The Federation of Small Businesses has launched a blistering attack on the “never-ending saga” of auto-enrolment, criticising the cost to firms alongside transparency of pension charges and the quality of Government communications.
Speaking at a Social Market Foundation fringe event at the Conservative conference in Manchester yesterday, FSB national policy chairman Mike Cherry said the original intentions of auto-enrolment have been “skewed”.
Auto-enrolment was introduced for the biggest companies in October and will roll out to all firms in a series of staging posts between now and June 2015 when it will apply to micro-firms of less than 10 staff.
Cherry said: “It seems to be a never-ending saga. It started in 2005 when it had cross-party support so it was a done deal as far as business was concerned.
“Lord Turner’s original intentions have been skewed. Since then we have had choice brought in which is a retrograde step.
“For our members it is about affordability and any question of choice leaves the associated liabilities of making the wrong choice for their employees, which could come back to bite them in the future.
“Despite Government re-assurances that it is most unlikely to happen it does raise comments from our members.”
Cherry said the Government’s advertising and communications campaign had not done “anywhere near” enough to make people aware of the changes.
He also slammed the pensions industry for being “incredibly bad” at making charges transparent and called for more action on disclosure of fees.
The Forty Group of Conservative backbench MPs have called for micro-firms to be exempt from the reforms.
Cherry said: “We were calling for an exemption for micro-businesses and moved significantly forward on it but our lobbying will now focus on the remaining administration and cost burdens.
“It is not helpful to hear political comments on the national minimum wage too. I am worried about the impact of the minimum wage going up too much when auto-enrolment kicks in and the double whammy which could face firms.”
Speaking alongside Cherry, Conservative MP Harriett Baldwin said: “There were some changes to the timetable for micro-business but I do not anticipate any further changes to it.”