GOVERNMENT MUST GO FURTHER ON RED TAPE SAYS BCC
October 1 2012.


Today is the second Common Commencement Date for 2012, which will see a number of changes to regulation come into effect.

Commenting, John Longworth, Director General of the British Chambers of Commerce (BCC), said: "The government has acknowledged that red tape is a key issue for business that often prevents firms from focusing on employment and growth. Business will welcome the deregulation that we have seen in recent months. However, more needs to be done if we are to see a real reduction in the complexity and quantity of regulatory burdens affecting companies on the ground. Only significant reductions in red tape, both domestic and European, will give businesses the confidence to grow, innovate and create employment in the long-term."

On pensions auto-enrolment, the biggest regulatory change to affect businesses this year:

"Auto-enrolment will encourage individuals to prepare for their retirement and help the country to avoid a pensions time bomb. However, for employers it represents a significant new burden and the government must do more to ensure that all firms are aware of these additional responsibilities.

"The government and The Pensions Regulator must prioritise communication to employers of all sizes, particularly given the recently-launched advertising campaign directed at employees. Smaller firms, in particular, will need more support to minimise the time spent trying to adjust to this new regulation, and will want to feel prepared to answer their employees' queries."

On cost recovery by the Health and Safety Executive (HSE):

"It is as though the government is taking one step forward and one step back. The changes around 'strict liability' attached to some health and safety regulations, and the reductions in inspections announced last month were welcomed by businesses. And yet this change risks damaging relationships between good, law-abiding companies and the HSE. We are concerned that the new regime will effectively incentivise health and safety inspectors to find businesses in material breach of regulations. Under this new regulation, the focus of health and safety inspectors could shift from helping honest companies to making money for the HSE."

On changes to the National Minimum Wage:

"While the pressures of inflation are hurting many people, especially the lowest-paid, the government's first priority must be to tackle the short-term symptoms and long-term causes of high youth unemployment. The decision to maintain stability in the minimum wage for younger age groups will help reduce one of the barriers to employers deciding whether or not to take on a young person under the age of 21.

"The decision to increase the rate for apprentices and over 21s by 1.8%, far above our recommendation, will add significantly to the cost of doing business, and will feed wage inflation at higher levels. The effect of these rises will be to reduce growth and job creation.

"In particular, the increase in the apprenticeship rate will reduce the financial incentive for employers to invest in recruiting young people as apprentices rather than to standard minimum wage jobs. Many employers already choose to pay more than the minimum rate where they seek apprentices with more advanced starting skills, but others rely on low costs to create additional jobs. The BCC will continue to work with the government to promote apprenticeships to ambitious young people and employers."