THE CBI has urged the Government to show leadership in the pensions crisis by acting on the advice of the Turner Report.

The employers’ organisation has praised the Turner Report on pensions (published October 12) after the CBI revealed figures showing employer contributions have doubled to £37bn a year since 1997.

Nigel Bourne, CBI South East regional director, said: "The report shatters the illusion that there is a single magic solution to the pensions crisis."

Mr Bourne argued the rise in employer contributions is hitting company profits, damaging investment and threatening jobs.

The latest research from the CBI estimates employer contributions rose from £18bn in 1997 to £37bn in 2003. It argues that this demonstrates the strength of employer commitment to pensions, even though "a Molotov cocktail of circumstances" has combined to undermine final salary provision.

Mr Bourne said: "The report is right to suggest there is no easy solution to the pensions crisis. Compulsory contributions would be a complete blind alley as it could cost business up to an estimated £22bn a year and firms would see it as ‘a tax on jobs’, while employees might resent being forced to invest in the stock market.

"The report makes clear that the emerging pensions crisis is most serious for low paid employees. Unless we act, these will be the poor pensioners of 2030.

“A bigger role for the state is inevitable and Adair Turner is right to highlight the need to embrace a varied approach, rather than focussing on one option.”

The CBI hopes the Turner Report has highlighted the extent of the problem the country faces and showed it is time to face up to the scale of the dilemma and start talking about credible solutions.

Mr Bourne added: "Firms must do more, but so must individuals and government. It may be politically difficult but it's a government responsibility to show leadership and so far this has been insufficiently forthcoming."