New agency workers and paternity rights ‘will cost Britain £25 billion’

The British Chambers of Commerce (BCC) has called on the new government to reassess impending employment legislation, which it claims will cost business £25 billion and endanger the economic and job market recovery.

Neville Reyner, the BCC’s president, told PM that the business group advocated a postponement of tabled legislation until 2014 and “a re-look at some issues and a phased approach” of the mainly UK laws, in order to reduce the administration burden and costs to business.

The £25 billion estimate over the next four years includes the scheduled increase in national insurance contributions, additional paternity leave, the Agency Workers Directive and forecasted national minimum wage increases.

Reyner said that the BCC broadly supported the proposals of the recent emergency budget, and the national insurance breaks for business start-ups outside the south-east as a stimulus for job creation.

While acknowledging the public spending cuts “were needed”, Reyner expressed concern about the acute job losses in de-industrialised regions with a heavy reliance on public-sector employers.

He said: “We recognise there is a fine line with the speed of introduction of cuts and it needs to be clearly managed, otherwise we are concerned about a double-dip recession. There is a danger socially [in these areas], which is why the government must be careful how it does this. Regional economic strategy is about getting the balance right.”

Reyner explained that “entrepreneurship, innovation and a multi-skilled workforce,” were part of the way forward for the economy, while the green agenda and a lift in manufacturing exports provided job opportunities in the upturn.

But Reyner highlighted languages and soft skills, as well as engineering and maths, as possible skill gaps in the economy.

“For our country to grow and sustain we have to become an exporter and languages have to be developed,” he continued. “People must look at what industries we have and the industries that are emerging, and introduce the skill sets to meet those needs going forward.”

By Michelle Stevens