Not Me Guvnor

I like George Osborne. Phew! Okay I'll be back tomorrow to finish this post once I've had a rest in a darkened room. No seriously I do, he speaks a lot of sense and he has the delivery of a good car salesman who can tell you all about the advantages of GPS anti-theft tracking devices whilst failing to tell you that the car only does 8 m.p.g.

He also has the advantage of being in a position where legislation that was passed by the previous administration will come into effect on his watch and he will be able to say, without lying to the 'House' or the public that said legislation was debated and passed, end of story. This week the main topic of debate has been the 2008 Pensions Act, even the mere typing of those words has me reaching for the window to increase the airflow into my office, and what it will mean to those of us who still have a job in 2012.

Putting politics to one side for a moment, no I can't because without party or personal politics involved this would be a non-story and this is a good story. Back in the old days when you could tell right from left, right wore a two piece blue suit and hairstyle by Gerard of Mayfair and left wore a pseudo donkey jacket and bad haircut, the right stood for self-reliance, self aggrandisement, and realising the benefits of your labour through second homes, private education and all those other meaningless stereotypes, whilst the left went down the pub, smoked itself to death, joined a union and believed the State would look after it into old age, we were sold the idea of personal pension plans.

Pensions looked a good idea on paper and everybody, well not quite everybody, got carried away for a while before they realised that high growth in a pension meant that high interest rates, inflation and a buoyant economy for the next millennium, none of which could or would be sustained because the economy works it's magic in cycles.

Anyway, realising this, various different schemes were tried to encourage people to save or make provision for their old age, under the Labour Government this was actually a subtle shift away from the 'cradle to grave' concept of the welfare state and a stray into what I would class as more traditional Conservative politics, the idea that you look after yourself during your working life so that you are less reliant on the state during your retirement. And so the Pensions Act 2008, which followed the 2006 White Paper, was finally enacted on 26 November 2008, the implementation of which will begin to take place in October 2012.

Now it seems to me that this is a win-win situation for the Conservatives when it comes to the P.R debate. Cast your mind back twelve months to the debate on the proposed increase in National Insurance contributions, the 'tax on jobs' that was judged by the then opposition and 21 of its best friends (those companies that supported the Conservative argument) to be a plague on all our houses. Once again the politicians in whom we place our trust argued that a 1% increase on what is actually a tax by another name would have a detrimental impact on job opportunities and should be resisted with all the fervour of a vegetarian who has just pitched up at Smithfield market by mistake to discover the only thing on the menu is meat.

This is what will happen after October 2012 (courtesy of the DWP)

The implementation of the new regime will start in October 2012 for the largest employers with over 120,000 employees. Other employers will be brought into the regime in stages, in order of size (although employers may choose an earlier date subject to certain conditions), so that by October 2013 all employers with over 800 employees will need to comply, with all employers having more than 50 employees being affected by July 2014. By October 2016 every employer in the country will have been staged in. This now gives employers a timescale to work towards in terms of considering the implications of the new legislation - in particular, its potential impact on pension and wider total remuneration costs.

Look again at that last line: "its potential impact on pension and wider total remuneration costs." It's a a tax on jobs by another name which will impact firstly on all those companies who signed up against the tax on jobs last year. What's even more baffling, ironic, call it what you will is that IDS's department are actively taking credit for implementing the new legislation. So those companies who were against the 1% increase last year will now be faced by an increase in costs anyway. Of course there is another side to this which I'm sure anybody who can read between the lines would have spotted by now and will be screaming at the screen. Had Labour won another term in office we would have had both the employers national insurance tax on jobs and the pension provision tax on jobs and that would have had a significant impact on private sector jobs. We don't live in a society where wealth trickles down, only legislation. Small businesses would ultimately suffer as much as larger ones.

The wider point is that the Pensions Act 2008 fits into the old ideology of Conservatism whilst embracing the new ideology of the Big Society and yet was Labour's white paper and enactment in the first place. Politics eh? Bloody hell!