I am not an avid reader of the national press, but chose to buy The Guardian on Tuesday to see if they had any coverage on a recent report from the Joseph Rowntree Foundation on UK Income Standards. As it happened, the paper did not cover this in any detail, but my eye was then drawn to an article with the following headline:
Industry pressure neutered pensions plan for low paid
The full article can be viewed here:
https://www.guardian.co.uk/business/2012/jul/09/insurance-industry-pressure-pension-plan
And when I returned to my office today, I spotted an article from the trade press with the headline:
MP’s attack ‘greedy’ industry lobbying
and this article can be viewed here:
Now, I am not about to deny that lobbying from the industry has surely gone on against the early removal of NEST restrictions.
But by the same token, its quite safe to assume that lobbying from NEST, and others, has also taken place to have those same restrictions removed with immediate effect. And in this battle of the lobbyists, it’s worth remembering that NEST is likely to have more direct access to the Government ear than the wider pensions industry.
So it’s unfair to only assume that one side has been involved in this conversation.
And what’s more, fairness is at the heart of this entire issue.
NEST has been funded (albeit by a loan) from the Government, and has an incredibly low charging structure, and much lower than many commentators (myself included) ever really expected. There is therefore an element of anti-competitiveness here, and if the suspected lobbying to keep the NEST restrictions in place has been successful, it may well be that our political masters fear this accusation being taken further.
So it’s not quite as clear cut as it’s being painted.
For my part, I regularly said in the early days of the Auto-Enrolment conversation that I could see no reason why NEST (or NPSS as it was then) should have any restrictions as these would clearly not aid the individual saver. And I do still maintain this.
But, and it’s a significant but, it seems wrong to remove those restrictions at this very late stage. Many employers have made decisions and selections around pension scheme offerings on the understanding of what the NEST offering is. If this is to change earlier than anticipated, then this is surely unfair to those employers who have embraced Auto-Enrolment duties early. For more on this issue, see my post from earlier this year:
https://www.jelfgroup.com/blog/2012/03/proposed-nest-changes-but-is-it-fair/
Finally, and without over playing it, I do find it a little hard to stomach that the industry is being accused of being greedy by MP’s.
Whilst many MP’s are sound and upright representatives of their constituency, it was only relatively recently that the expenses scandal rocked Westminster, and indeed the wider reputation of the UK.
I also suspect that one of the primary tools of political lobbying would involve entertaining the lobbyists target. Or to put it simply, those being lobbied may well have benefited from being wined and dined in exchange for the air time to voice an opinion.
Yes, there are plenty of vested interests across the board here, and no one answer may be right at this late stage. Yet I do also feel that the old saying of “People in glass houses” should perhaps also be considered before wide ranging accusations are levied.
Best regards
Steve
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