Latest employment laws 'will add £700m' to red tape bill

2005

New workplace regulations that have come into force will cost employers more than £700 million, the British Chambers of Commerce has warned.

Changes to the minimum wage, implementation of parts of last year's Employment Relations Act, new rules on informing and consulting employees and changes to the law over warranties, all of which came into force yesterday, are adding to the red tape burden for businesses, it said.

The BCC has calculated there was a 46 per cent increase in the number of new regulations in the first half of last year, compared with the same period before.

The vast majority of new regulations came from Britain, and the proportion of European regulations was declining, it added.

David Frost, BCC director general, said: "Since 1998, red tape has cost British businesses nearly £40 billion.

"The burden of complying with regulation is one of the loudest complaints from employers."

Measures to cut red tape in March's Budget were "very welcome" but now had to be implemented, he added.

The BCC has also produced a red tape guide for businesses, available online at www.bcentral.co.uk/bccguides

However, there is some disagreement about what effect all these regulations will actually have on businesses.

CBI director general Sir Digby Jones has said the new rules on informing and consulting employees about major business decisions – part of the EU Information and Consultation Directive - will have little impact

This was because most companies were already involving workers, he said.

He said: "Few employers have to be told it's good business practice to make sure staff know what's going on and they don't need legislation to make them do it.

"The rules rightly avoid imposing costly, one-size-fits-all structures on companies when they are not wanted," he added.

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