Mr Webb is probably a very nice fellow but, like so many politicians these days, he has never had what most of us would call a ‘proper’ job, having studied at Oxford then working in academia until becoming a liberal MP in 1997. With other politicians, he has forced through a form of nationalisation of personal pensions, by a combination of: compelling employers to provide a pension, removing the right to choose commission, huge taxpayer subsidy of National Employment Savings Trust, then removal of the option for the poor employer to choose consultancy charging.
Does Mr Webb really believe that small and medium enterprises in the real world will have time to read all the Nest literature, understand exactly what they are required to do, ensure all payments are made to Nest, and keep on top of whether all their employees are eligible or not? Our real-world experience is that few employers have the time to get to grips with the numerous requirements of running an AE scheme. In fact, a brief look at the AE requirements is enough to totally confuse many, and get them running for an adviser (numbers of whom have been drastically culled).
Finally, the poor employer will find that they have no real-world choice but to pay for the advice and administration on top of the 3 per cent contributions. Or they could take Mr Webb’s advice and do it themselves, easily finding their way round the rules and requirements, and engaging the services of a government-controlled computer system (for which there is such a fabulous track record) in the Nest system, run by an Indian car manufacturer. And Nest is allowed to levy an initial charge, but no one else can now.
Most smaller employers have yet to grasp all of this. It is a slow motion car crash.
Mark Osland
Director, Formula
South Croydon
