Warning over cost of new work laws

New employment laws coming into force over the next four years will cost industry a “staggering” £22.8 billion, a leading business group has warned.

The British Chambers of Commerce (BCC) said a raft of new measures are being introduced despite a pledge from the Government to cut red tape after being warned it is stifling job creation.

Firms will be hit by seven major changes in 2011 alone, including the Agency Workers Directive, which the BCC said will cost business £1.5 billion.

Giving workers the right to request time off to train will cost £174 million a year, while pensions reforms will have an annual recurring cost of £4.5 billion, said the BCC.

Three changes were being planned to parental leave in the coming few years, with every change coming at a price to businesses, according to the chambers.

David Frost, director-general of the BCC, said: “The Government claims business growth is top of the agenda, yet UK firms will be hit with huge costs once these new regulations come into force.

“Companies cannot generate growth and create jobs when they are facing a £23 billion bill, just to implement new employment legislation. 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.

“These new regulations, such as changes to the right to request flexible working, paternity leave, and the abolition of the default retirement age, will leave employers confused, and distract them from growing their business.

“The Government must use the upcoming Budget to act on its promises and deliver concrete reductions to the regulatory burden faced by the private sector, so that it can deliver a year for growth in 2011.”