Scrap AE in the face of a no-deal Brexit, Home Secretary says

Written by Theo Andrew
18/09/2018

The Home Secretary Sajid Javid has recommended scrapping automatic enrolment if Britain were to leave the European Union without a deal.

According to a report in The Times, Javid made the suggestion as an emergency measure which would be needed to keep the economy ticking over, alongside suspending environmental regulations and workers' rights.

Auto-enrolment has produced nearly 10 million retirement savers and is renowned for being an overall policy success since its implementation in 2015.

One of Javid’s colleagues told the newspaper: “This was very much Saj auditioning to be a no-deal chancellor”.

Responding to the suggestion, former pensions minister and Royal London director of policy, Steve Webb, tweeted: “There were a few times in 2010-15 when we had to resist pressure to scrap auto-enrolment – there are some who have never accepted the basic principle.”

Furthermore, Webb suggested that the then Department for Business Innovation and Skills was also resistant to its implementation and that the process wasn't helped by the publication of the Beecroft report.

According to the Beecroft report on employment law, published in 2011, automatic enrolment was “projected to reduce the number of jobs in the country by up to 60,000”, however, unemployment rates have halved since 2011.

Last week, Work and Pensions Secretary Esther McVey hailed a “pensions revolution”, driven by the success of auto-enrolment.

However, the Office for National Statistics also warned that average contributions into private sector DC pension schemes during 2017 fell to 3.4 per cent from 4.2 per cent in 2016, and have decreased significantly from 2012’s level of 9.7 per cent.

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