Opperman ‘on track’ for mid-2020s AE reform; bill ‘sat’ in office

Pensions Minister, Guy Opperman, has said that he is still on track to implement reforms outlined in the 2017 Auto-enrolment (AE) Review by the mid-2020s and that he has a three-clause bill “sat” in his office.

Speaking at a session in the Work and Pensions Committee (WPC), Opperman stated that while he was on track to implement the reforms by the mid-2020s, the impact of Covid and wider financial crisis have meant he has not been able to take them forward as soon as he would have liked.

“Does DWP want to drive forward AE, do the 2017 review and go further than that? Yes we do, and I’m absolutely certain we will do that,” he said.

“Personally, I consider it as a given and it is government policy to do that. My personal view is we’ll go way beyond 8 per cent to 12 per cent in the longer term.

“If Covid had not happened and if the consequences - we could discuss how it is inflation has come to pass, whether that is Covid, the war in Ukraine, the wider fiscal problems the world is facing - do I think I would have been able to introduce this at an earlier stage? Yes I do, without a shadow of a doubt.

“But, at the same stage, you have to play the cards you’re dealt, and I’m absolutely certain we are going to do this.”

Opperman noted that there was no dispute in government about the need to move forward with the recommendations outlined in the review, namely reducing the lower age threshold to 18 and lowering the earnings trigger so contributions are payable from the first pound of earnings, it was just a question of when.

He refrained from offering a specific date the reforms might be implemented when asked, but noted that if the inflationary cycle eases fairly soon and the fiscal situation improves, he was confident it would be done by the mid-2020s.

WPC chair, Stephen Timms, then asked Opperman whether the reform would need to be in a new Pensions Act.

“No, it doesn’t,” he responded. “I’ve got the bill. Genuinely, sat in my office at the Department for Work and Pensions is a three-clause bill, I believe it is, because you have to do a separate clause for Northern Ireland.

“It is a very simple bill that effectively changes the age and changes it to the first pound earned. I thought it was going to be bigger, if you’d have asked me this questions three years ago I would have said it would be a 10-12 clause bill.

“We believe we can do it very simply because you do a very simple bill, two or three clauses, you then can do a consultation and secondary regulations.

“My preference would be to legislate then consult. I hasten to add, there is a separate school of thought which is, given this is relatively simple, you could perfectly easily consult and then legislation having set out in the consultation ‘this is what we are going to legislate to do’.”

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