REC response to new Pensions Commission: ‘Change is not free’

Commenting on the government’s new Pensions Commission, Neil Carberry, REC Chief Executive, said:

“There is no doubt that sustainable pension saving matters, and one of the great successes of the last 20 years is the consensus-based introduction of automatic enrolment and employer contributions from 2012. But that change wasn’t free – businesses have stepped up to pay more in partnership with their employees. Any review to this settlement needs to be done with business – not to them. The jury is out on whether we can repeat the good work of the Turner Commission, which was based on deep partnership with business that made it successful.

“We are particularly concerned at the wider impact of this announcement. Employment costs in the UK have been rising, and we must be a competitive and attractive place to create jobs. With technology reshaping our labour market, a huge raid on employers in the form of National Insurance rises this April, pay driven up by minimum wage rises of a quarter in three years, and the threat of a hugely bureaucratic approach to employment rights in the form of the Government’s current Bill, firms are already deeply concerned. If the government wants to drive up business investment and thereby economic growth, firms need the capital to do that. Many business leaders will see this as another potential increase in costs – to be successful, the Commission and the DWP will need to ease those fears by moving slowly, working with business and remembering that the success of automatic enrolment is in the support it generated from employers across the country.”