Growing 'red tape' burden on UK business

Red tape is costing UK business almost £5bn a year, placing an "astonishing burden" on British companies.

A new report by the Institute of Directors has estimated that the introduction of the maximum 48 hour week will cost £2.3bn a year, while this year's minimum wage legislation will increase the burden by a further £2.4bn.

Both regulations are also criticised for impeding flexible working - one of the major developments in work practice over the last decade.

The report goes on to blame the "overwhelming bureaucracy" that currently weighs down UK business, with the report's author, Richard Baron, saying: "Businessmen and women work hard to create jobs and wealth for the nation. They must be allowed to focus on business decisions, not distracted by red tape."

Adding to the strains are even more recently announced rule-changes, such as unfair-dismissal, parental leave enhancements, working family tax credits - for employers the list of new regulations they have to consider is daunting.

The IoD believes that the shift towards employee rights has gone over the top, reaching a level where business is suffering as a result.

Gary Cutlack