Shadow pensions minister Matt Rodda has said he was keen on expanding auto-enrolment but he would not be drawn on Labour’s plans for pensions taxation during a talk with the Society of Pension Professionals.
Rodda, who replaced former shadow pensions minister Jack Dromey during a reshuffle in January, told the SPP that the Labour party was keen to open auto-enrolment to “those who earn less than £10,000 a year, but also people who may have more than one employer”.
He admitted, however, that he has “only started” work in this area, and has not yet gone into much detail as “it is such an enormous issue”.
He said: “I'm not in a position to announce anything new at the moment. But I think that the fundamental point to consider about auto-enrolment from my perspective, looking at it from the outside, [is] it seems to be a real step forwards in terms of pensions policy, is offering both safer pensions to a much greater number of people. However, there are real challenges and we need to start thinking about those.”
Asked whether the Labour party has a view on what an adequate income in retirement is or should be, Rodda said it was something he would “like to look into” in the discussion around auto-enrolment, but that rather than setting “a particular figure” the point should be “to examine it and try to understand what’s relevant in the modern world”.
CDC
Rodda said collective defined contribution seems to be “an interesting option” for bridging the gap between DB and DC, but was cautious about going further than that before seeing the government’s draft regulations.
“The latest is that they could be some months away. So I think, unfortunately, I wouldn’t want to make any comments that are too specific at this stage,” he said.
He added that he was aware of some of the criticisms levelled against CDC schemes as operated in the Netherlands, for example, which is a reason to “proceed with care”.
Online harms bill should protect pension savers
Rodda was more forthcoming when asked about the state of the online harms bill currently making its way through Parliament. He said it could provide the foundation for offering more protections for pension savers, but that in its present form it does not go far enough.
“The issue of pension scams hasn’t really been given a great deal of coverage. Now I’m hoping that [...] when the bill actually comes to parliament in its final draft, that there’ll be a number of measures in there to protect pension savers,” he said.
He mentioned having similar rules around cold contacts for pension savers on social media as currently exist for telephone contacts.
“I hope there is scope for it, but one of the big problems we face as parliamentarians is just the range of different industry sectors which are trying to interact with this bill,” Rodda continued.
“We are in a sort of world where the headline issues largely [focus on] children and social media. I do hope we can work together to really focus on the aspects of it because it should be an opportunity to do something to protect pension savers, because the vast, vast majority of the industry behaves in a very responsible way and wants to be protected from untoward operators coming in and trying to mislead on pension savings.”
No answers on pension taxation
Pressed on where he would like to see pensions taxation going, Rodda said that he was unable to comment “at this point in our policy development cycle”.
He likewise refused to be drawn on issues around net pay arrangements, “because that in itself is quite an interesting issue to do with taxation – and the way that we’re raising taxes and so on in the future. So I better steer clear of that, tempting as it is”, he said.
“It is a very interesting issue and we do want to look into it and consider it, but at the moment I can’t make comments on future tax policy, I’m afraid.”
Benjamin Mercer is a reporter at FTAdviser's sister publication Pensions Expert
