SMALL businesses in Worc-estershire and Herefordshire could be harmed by proposals in the Pensions Commission's report claims the area's Chamber of Commerce.

If some of the recommendations eventually became Government policy, redundancies and wage freezes at small firms could follow.

Gary Woodman, the chamber's policy and lobby executive, said: "We are very disappointed to see the speculation that employers would be expected to pay into the so-called 'National Pensions Savings Scheme' (NPSS) alongside employees, has been proved right.

"Small firms would be particularly badly hit, and businesses have told us that they would have no option but to lay-off staff, freeze salaries and much needed investment. This is compulsion by the back door and would be bad for businesses, their employees and the UK economy as a whole.

"The administration of this scheme is a major worry. It could be a real nightmare for small firms."