Red tape to cost firms extra £23bn
15 February 2011 9:17am
A NEW swathe of employment laws will cost UK companies £23bn over the next four years, according to the government’s own figures, casting doubt on David Cameron’s pledge to foster private sector growth by cutting red tape.
Employment rules brought in by the UK and the EU will cost firms a total of £22.87bn between now and 2015, according to figures compiled by the British Chambers of Commerce from the government’s impact assessments.
Despite Cameron’s promise of an “employer’s charter” last month, a minefield of rules on everything from agency workers to employee training and pensions reform will more than wipe out any financial gains for businesses. In 2011 alone, new rules will cost firms up to £1.4bn, with changes to employers’ national insurance contributions responsible for most of the burden.
The coalition has also argued in its assessments that the removal of the default retirement age this October will save employers £47.8m a year thanks to a better labour supply and less paperwork – a claim that has been widely disputed by industry bodies such as the CBI.
The director general of the British Chamber of Commerce David Frost, said: “Unless the government reduces this kind of red tape, we will continue to have high levels of unemployment and could end up derailing the recovery. Companies cannot generate growth and create jobs when they are facing a £23bn bill, just to implement new employment legislation,” added Frost.
Businesses must also comply with the EU’s Agency Workers Directive from October, which will cost employers £1.55bn a year once they are required to treat agency workers equally after three months’ work.
EU rules do not count as extra regulation under the government’s “one in one out” policy intended to limit the cost of red tape.
A spokesperson for the Department of Business, Innovation and Skills said last night that many of the costly rules are currently under review, adding: “The aim of our ongoing employment law review is to ensure that the balance between business confidence, economic growth and fairness to employees is right.”
WHAT GOVERNMENT RED TAPE WILL COST UK BUSINESSES
EU agency workers directive -
starts in October 2011 - will cost
UK businesses £1.55bn a year
UK pensions reform -
October 2012 - £4.5bn a year
National Insurance changes -
April 2011 - £1.2bn a year
Right to request time off work to
train - April 2011 - £175m a year
Minimum wage increase -
October 2011 - £42.6m a year
Total cost to
In other news
June 5 will be the next crunch point in the Greek debt talks. [Read more]
The customer is king when it comes to winning amid an increasingly competitive retail landscape. [Read more]
Top tourist attraction Madame Tussauds Marylebone site has been snapped up by a Taiwanese insurer in a multi-million [Read more]
The Chinese city of Guangzhou may have banned Uber, but that hasn’t stopped its municipal government setting [Read more]
Labour has performed a balletic U-turn this morning, abandoning its opposition to EU membership referendum. [Read more]
Greece’s interior minister has said that the country cannot afford its 5 June payment to the International Monetary [Read more]
Young people aged 16 and 17 years old should be given the chance to vote in a EU referendum, according to the [Read more]
The Bank of England is carrying out a confidential investigation into what would happen if the UK left the European [Read more]
This year's Eurovision Song Contest will feature an addition to the normal line up – for the first time ever, [Read more]
Tonight is the 60th Eurovision Song Contest, and once again we're in for an evening of cheesy music and crazy [Read more]
The Eurovision Song Contest is getting more and more expensive, despite Europe's decline into austerity. [Read more]
There were delays of up to 30 minutes to trains in and out of Kings Cross Station, after the station was re-opened [Read more]
When a 20-year-old footballer publicly declares he wants to leave a club and his agent hurls insults at one of [Read more]
The outbreak of bird flu in the US is leading to an unprecedented situation for companies reliant on eggs – [Read more]
Germany's finance ministry has denied reports it was considering offering Greece its own parallel currency. [Read more]
Chancellor George Osborne was given a boost today, as higher tax receipts helped shrink the deficit by more than [Read more]
Beleaguered spread-betting firm Plus500 today suspended trading in its shares on London's junior market, following [Read more]
The news that card and electronic transactions have overtaken cash as the UK’s preferred method of payment is [Read more]
Despite the crippling effect of election uncertainty, offers received in April were up 15 per cent on last year [Read more]