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Tories vote down auto-enrolment in protest

The Conservative Party voted against the regulations for auto-enrolment in the House of Commons yesterday in protest at the Government’s delays to implementation and news that Pada plans to sign the admin contract for the Nest scheme before the general election.

The party lost the vote but the move prompted the Government to claim the Tories “voted against pensions for millions” in a release today.

Secretary of State for Work and Pensions Yvette Cooper says the move is a “shocking attack” on pension provision for people in work.

Speaking to Money Marketing, Conservative Shadow pensions minister Nigel Waterson (pictured) says: “We had a committee yesterday which considered the regulations for auto-enrolment.

“Although we did welcome some of the regulations I was basically kicking up a fuss about the long delay in implementing personal accounts and what I described as their cavalier attitude to procurement on the eve of a general election.

“We had a bit of a punch up about the Pada contract. We voted against the regulations to protest what was going on.

“We lost but were trying to make a point about the fact the implementation of personal accounts seems to be turning into a marathon not a sprint.”

But Cooper says: “These reforms, supported by the CBI and the British Chambers of Commerce amongst others, will give millions of working people vital pension support for the first time – the most radical reforms for working people since the introduction of the national minimum wage.

“Now we know the Tories want to kick people in the teeth and take that pension promise away.”

Meanwhile, Pensions Minister Angela Eagle says: “I am astonished that the Tories have thrown their toys out of the pram just when the prize of pension saving for millions of people on low and medium earnings is in sight. This is breathtaking irresponsibility.

“The Tories are being disingenuous and hypocritical by talking in favour of the consensus but voting against giving millions of people access to a workplace pension.”

Hargeaves Lansdown head of pensions research Tom McPhail says: “This is like watching a poor quality spoof of the Monty Python People’s Front of Judea sketch. The Tories are right that the delays are short term political sleight of hand to save money.

“Voting against the reforms is just petty and the tone of moral outrage from Cooper and Eagle is contrived and dishonest. I say a plague on both your houses, reform of the pension system is too important to be the subject of petty bickering.”

The Personal Accounts Delivery Authority announced this week that Tata Consultancy Services was the successful bidder for the National Employment Savings Trust scheme administration services and that it intends to sign a contract with the company later this month before the expected general election in May.

Chancellor Alistair Darling announced in his pre-Budget report in December that employers could contribute only 1 per cent to their employees’ pensions for an extra year, resulting in members not recieving the full 3 per cent contribution until October 2017.

The Treasury estimated the move would save it £2.4bn.


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There are 16 comments at the moment, we would love to hear your opinion too.

  1. The more this Governent tries to push through the less likely it is to get it’s own way.

    NEST is ill conceived and will not work. We already have a range of options for everyone in relation to Pensions.

    It is about time this whole thing was thought out again and this time with at least a little bit of advice from the industry.

    Never before in our history have we seen one Political Party mess around with Pensions so much, how many changes have there been and nothing is given a chance to bed down, one bloody hairbrained scheme after another from a hairbrained system that appears to be on a mission to self destruct.

    When will the the man/women on the street be considered in all of this.

    Could someone please check to make sure that TATA have not got guaranteed terms on their admin contract, because this NEST scheme will not last. You can bet your life that there will be only one winner in this. You guessed it. TATA.

    Richard Smith

  2. Nice to see that Labour are honest in their admissions about the lack of benefits NEST will provide for low earners!

  3. Incompetent Regulators Awards Team 4th March 2010 at 10:25 am

    What I read into this is that the Tories have other plans which the media and Nasty Labour don’t realise. To suggest the Tories are against pensions is laughable and mud slinging by bitchy Labour trying to gain cheap political points.

    Lets just remember pre Nasty Bitchy Labour we had the best funded private pensions in the world, now we have a decimated private pension sector whilst the public sector employees ride off into the sunset at our expense.

    Lets just watch this space. As what we all need is a reason for the public to save e.g. incentives and a reason for products to be sold e.g. commissions. If it’s not broke why try to fix it?

    Finally, public sector employees should have their pensions cut even in payment. As we in the private sector have had our raided by the politics of jealousy of Mr Boom & Bust!

  4. David Trenner - Intelligent Pensions 4th March 2010 at 10:31 am

    I think the final line of this piece says it all: Personal Accounts/Nest was delayed by the government to save money.

  5. Ironic Labour ministers talking about the Tories pensions attack given the Labour record on attacking pension since 1997 and the terminal damage they have done in the UK.

    I really do want rid of this Govt as they are clearly at a loss of how to handle this mess but a hung Parliament? Could be even more messy.

  6. The Tories’ position might look a bit better were they to announce something ~ anything ~ in the way of alternative proposals to quasi-compulsion into NEST’s which simply retain all the faults of the present pensions framework.

    What about all the still empty stakeholder shells that employers were obliged to set up nine years ago? Doesn’t that tell us something about the need to make pension plans more attractive instead of forcing people into a scheme that they don’t understand and don’t want?

    Compulsion isn’t the solution. What is really needed is total reform of the present pensions framework.

    If the CBI and the British Chambers of Commerce really support NESTs (though somehow I doubt it), then whoever the parties are who have indicated such support on behalf of those organisations obviously haven’t read any of the numerous publications decrying all the things wrong with the present pensions framework. If they did read those publications, then they’d realise that their support for NESTs is lamentably misplaced.

  7. Classic, ‘as long as we have the moral high ground we don’t mind shooting ourselves in the foot’ stuff from the Tories.

    Do they really want to win this election? They’d better start playing the ‘game’ a bit more intelligently if they do.

  8. Dennis J Burling ACII APFS 4th March 2010 at 10:39 am

    What a huge waste of tax payers money this is – let alone the millions that the pension industry is yet again going to have to stump up to offer this new scheme to people who don’t want it and will undoubtedly opt out at their first opportunity until retirement means testing is done away with. I hope the whole industry boycots the whole thing!!

    Why oh why dont politicians realise that they don’t have to keep reinventing the wheel and use existing stakeholder contracts instead, thereby saving millions for everyboby – I have every confidence that the tories would still want to go ahead with this and still set up auto enrollment but without the added complexity using existing plans instead.

    Labour should also be ashamed of themselves for signing before the election – maybe Tata forced them to however I think that this is yet another cynical tactic to cause even more problems for a new government when they loose, as they certainly havn’t had my vote for many years now.

  9. The government’s duplicity over the arrangements for NEST is compounded by Yvette Cooper’s juvenile outburst as reported above.
    Once again the financial industry is faced by a major change in pension provision (remember the Stakeholder fiasco that cost us all millions?) the legislation for which once again is woolly, ill thought out and full of holes.

    The Tories are right to try and bring the public’s attention to what is actually going on.
    Regarding auto-enrolment – it’s a joke! The employers have a duty to enroll but employees can opt-out after three months. who is going to police this? Does this option not stink of ‘breathtaking irresponsibility’?

    What so marvellous about a mandatory pension system that has an opt-out albeit a recurring one (every three years).

    If labour really wants to mend the ‘pensions timebomb’ they need to be much tighter on the rules, and have plans that would work in practice. Once again we are faced with a hotch-potch of a plan that’s going to cost employers and taxpayers a lot of money and not achieve its primary objecvtive – that is, to
    ensure that all employees make pension contributions, no matter what they earn.

    Give people the option to opt-out and they will!

  10. Terry Mullender 4th March 2010 at 11:07 am

    When will this Government realize that thousands of low to average paid workers in their 40’s & 50’s will be severely disadvantaged by auto enrolment into NEST and should opt out due to the current system of distributing means tested benefits.

    This is the next pension scandal just waiting to happen!

  11. Meanwhile back in the public sector we learn this morning on GMTV that £1 in every £5 of council tax collected goes toward local government pension schemes!! How is that for an injustice!! The Tories are right to make the point NEST is no more than rearranging the deckchairs on the Titanic of our pensions problems..Hopefully the looming election will see an incoming tory government rectify the wrongs of the last thirteen years with respect to retirement planning.

  12. “Kicking people in the pensions teeth” that flipping rich coming from a New Labour Minister.

  13. Do not be fooled, this is just another tax on Business,
    Those who should gain from it (the lower paid) will not gain anything …. just loose there existing pension credits. Ask the Minister if the lower paid will get £1 out for every £1 they and their employer put in.
    (I will give you the simple answer NO)

  14. Stakeholder to NEST will take close to 20 years to implement. What was wrong with auto-enrolment and employer contributions under stakeholder? These under-pensioned in society issues are here and now!

    Also, when are we going to stop referring to employee & employer contributions of 1% etc and start refrring to the fact that this only applies to a band of earnings so many low earners will see derisory contributions that are worthless…….

  15. Michael Fallas 4th March 2010 at 4:30 pm

    Will we soon find that a few of the people involved in signing of this contract will be on the TATA payroll in a year or so’s time ??

  16. Piss Poor Idea, will make poorer people poorer, widen the pensions gab, torys not helping by taking away thhe one good idea it had auto enrollment, stupid…

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