Written Evidence to be reported to the House.
Pensions Bill
12:00 pm
David Yeandle: In exactly the same way as the CBI, certainly one of the major planks of our representation to the Government over the last two to three years has been to stress how important it is in terms of building confidence for employers, and particularly small employers, that the 3 per cent. minimum employer contribution is on the face of the Bill. I am extremely pleased that it is there, and that the Government have clearly indicated that it will be introduced on a phased basis over a shortish period.
We believe, like the CBI, that there is a real issue about smaller employers, because of course all employers—large and small—will benefit from the phased implementation and the fact that the 3 per cent. figure appears in the Bill. But there are an awful lot of small employers who, for the very first time, are now going to making pension contributions for their employees. So we do think there is a strong case for a relatively modest financial support package to be introduced and to last for a relatively short time when the scheme comes in in 2012.
We also think compensating some of these smaller employers for making contributions would send a very important message to the small business community. Clearly, that community and the employees in them are very much an integral part of the target market. It is really important that the small business community is seen to be as supportive of the Government’s proposals as possible. If the Government were able to make a gesture towards them in this way, that would be extremely helpful and would, I hope, avoid some of the problems that might otherwise occur in parts of the small business community.
In terms of the methodology, our members are very clear that, if there were to be any support, it needs to be done in such a way that it does not disadvantage the very people who work for the small employers who make up many of the people we try to support. We would not want, for example, an exclusion for small businesses or a longer phasing-in for small businesses. The idea that we have been exploring and trying to cost—although that is increasingly difficult—is to make provision so that a proportion of the employer contribution that is being paid into the employees’ scheme is refunded to the employers over a two to three-year period. They would get small compensation back for what they put in—not the full amount, but a phased reduction. I can give more details about that, if that would be of any assistance.