Businesses are unable to cope with extra costs and risk facing a period of real uncertainty if forced to pay into pension schemes, British Chambers of Commerce (BCC) Director General David Frost told delegates at the BCC Annual Conference. As businesses face rising levels of taxation and regulation, another burden like compulsory contributions as proposed by Lord Turner could be the tipping point for some firms.

Responding to the Pensions Commission’s report, Mr Frost said:

 

“We are facing a period of real uncertainty. Our firms need a reprieve from the difficult environment that they are operating in. Businesses need the Government to address the burdens that are holding them back.

 

“Businesses are already struggling to cope with an increasing raft of complex employment legislation. They are finding it impossible to recruit skilled staff – often taking on migrant workers to fill gaps. They are also trying to get their goods and staff around the country in the face of a failing transport system. And meanwhile energy costs rise relentlessly. Forcing firms to pay into a pension scheme is just a step too far.

 

”We welcome the fact that Lord Turner has recognised our ‘legitimate concerns’ about the cost of his compulsory pension contribution proposals on small businesses, by suggesting some form of subsidy. However, this will not help those employers that simply cannot afford to pay into schemes.

 

“Small firms will be particularly badly hit and businesses continue to tell us that they would have no option but to reduce salaries and lay off staff. A recent BCC survey found that 20 per cent of firms believe they would be forced to make redundancies if they had to pay into a pension scheme.

 

“The businesses that will be affected are the backbone of our economy, often second or third generation, family owned businesses. They feel the odds are very much stacked against them. They are trying to run a successful business – a business that creates jobs and wealth, a business that binds the community together. But a business where no one outside it seems very much to care or even understand the daily competitive pressures that business faces.

 

“All they hear is the Government mantra of the need to promote enterprise, but they see the reality on the ground – a world of growing legislation and burgeoning bureaucracy and ultimately pressure after pressure piling on.

 

“While life in the private sector has got tougher with rising costs and more competitive pressures, the public sector has enjoyed rising salaries and unfunded final salary pensions. Businesses simply cannot cope with any added costs pressures, for some it could be the tipping point.“