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BBC's Richard Griffiths reports
"The Government says it's committed to cutting red tape"
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Thursday, 20 January, 2000, 11:22 GMT
Business warns of 10bn red tape

New rules govern working hours

New regulations brought in by the government will cost businesses in the UK 10bn over five years, says the British Chambers of Commerce.

The organisation says it has used the government's own figures to work out the cost to industry of measures such as trade union regulation, the working time directive and parental leave.

The BCC is launching a campaign to cut through the red tape it says is stifling business.

It wants exemption from some of the new regulations for smaller firms.

Mo Mowlam heads a government task force
These would include a probationary period for new regulations, and a tax simplification task force.

Chris Humphries, Director General of the BCC, said: "Despite all its rhetoric, the reality is that government has dramatically increased the regulatory burdens that threaten small business competitiveness.

"Excessive red tape is stifling the very enterprises the government is seeking to promote. What business and government need most are specific examples of where regulation constrains the growth and competitiveness of British firms."

However, the government rejected the BCC's calculations, claiming it had "misrepresented" the true picture, particularly on the cost of the minimum wage.

"This government is committed to 'banishing the bumpf' - cutting red tape and reducing the regulatory burden on business," said a Cabinet Office spokesman.

Cabinet Secretary Mo Mowlam heads a task force set up to investigate the burden of red tape, and its costs to industry - in particular, small businesses.

In November, Trade and Industry secretary Stephen Byers said the government had begun the process of cutting red tape for small businesses.

In the future, he said, the government would make sure it imposed only regulations which were genuinely necessary, and it would also look back at existing rules to see whether they too were necessary and if they could be simplified.

Responding to the attacks on its methodology, Mr Humphries said the BCC had not used the wrong figures on the minimum wage, as claimed by the Cabinet Office spokesman.

Indeed, he said the cost of paying the minimum wage had not been included at all as it was not seen as a regulation.

"If we were to add the recurring financial costs of paying the minimum wage, the total cost of red tape on business would increase to a massive 17 billion," said Mr Humphries.

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See also:
18 Mar 99 |  The Economy
Red tape under fire
19 Jul 99 |  The Economy
Red tape stunting small firms
15 Nov 99 |  The Economy
Red tape task force
12 Jul 99 |  The Company File
The cost of red tape

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