Work and Pensions Committee
London: TSO, 2012 (House of Commons papers, session 2010/12; HC 1494)
The report looks at the National Employment Savings Trust (NEST), established by the Government as a low-cost pension scheme to deliver the auto-enrolment programme and address market failures in the pensions industry. However, the Work and Pensions Committee believes that certain restrictions placed on NEST will create complexity for employers and will disadvantage some employees. The Committee recommends that Government remove the following restrictions:
The Committee further urges the Government to proceed with its plans for State Pension reform, introducing a flat-rate State Pension and reducing the level of means-testing without delay. The report highlights the difficulties and complexity employers and employees currently face in comparing the fees and charges applied by pension providers. The Committee recommends that from 2013 onwards, the Government should use its powers to intervene on any charges that represent poor value for money. Auto-enrolment will impose new costs and may be particularly challenging for small employers; however the Committee considers that the Government has taken appropriate steps to minimise the impact on businesses through its gradual and flexible approach ('staging and phasing') to implementation.
P. Wintour and J. Quinn
The Guardian, Apr. 24th 2012, p. 5
The pain that quantitative easing had caused pensioners and savers should be offset by government compensation, a report by MPs said. The Treasury select committee recommended that the Bank of England provide an estimate of 'the overall benefit and loss' to those groups as a result of the money-printing operation.' Loose monetary policy, achieved through quantitative easing and low interest rates, has redistributional effects, particularly penalising savers, those with 'draw-down pensions', and those retiring now,' it said in its report on the budget. 'The Bank of England has argued that some of those effects may be mitigated by the increase in asset prices stimulated by quantitative easing. While the aggregate of savers and pensioners may have received some benefit from higher asset prices, there will be many individuals who will not have benefited.' The bank electronically created £325bn from 2009 to 2012, and used it to buy government bonds as a way of driving down the interest rate paid on them and stimulating the economy.
J.-P. Ford Rojas and L. Peacock
Daily Telegraph, Apr. 26th 2012, p. 7
The Supreme Court ruled in April 2012 that older workers could be forced to retire if firms could show it was in the public interest, despite the Government scrapping the default retirement age. Companies were told that they could dismiss older employees on the grounds of age as long as they conformed to guidelines laid down by the Court. Justifications could include making it easier to recruit younger workers, being able to promote middle managers, succession planning, and being able to end the careers of older workers with 'dignity'. The ruling concerned the case of Leslie Seldon, a partner in a Kent law firm, who complained he had been treated unfairly when compulsorily retired at 65.
The Independent, Apr. 10th 2012, p. 22
The British Medical Association was to ballot its members about the possibility of strike action in protest against the Government's changes to doctors' pension entitlements. Such changes would require higher contributions and the need to work for longer. NHS managers were drawing up plans to cope with the consequences of what would be the first mass walkout by doctors in England. Both the BMA and the Government appeared unwilling to back down but the Government was buoyed by the belief that there would be little public support for a strike.