Small businesses see more red tape in new Employment Bill

UK small businesses have hit out at the Government's new Employment Bill, claiming it will add more red tape to a sector already crippled by unnecessary bureaucracy.

A survey carried out by the Association of Chartered Certified Accountants (ACCA) shows that 66 per cent of small businesses questioned considered the Bill would have a detrimental effect on small firms operating in the UK.

The ACCA's criticism follows an attack last week by the Federation of Small Businesses. The FSB's policy chairman, John Walker, said: "The Department of Trade and Industry said the new Bill would reduce red tape, but for an increase in regulatory burden to be called a cut in red tape just goes to demonstrate the challenge we all face and how far governments can be removed from reality."

The Bill states that from January 2003 all business, irrespective of size, will have to follow formal disciplinary and dismissal procedures for employees. Currently, businesses with fewer than 20 employees are exempt.

Victoria Jonson, ACCA's small business project officer, said: "Many small companies employ family and friends in their businesses and are not used to such formal procedures. It will be very difficult for firms to enforce these new laws, given the way in which they operate."

Overburdening companies with more red tape will not only harm competitiveness within the industry but will reduce the willingness of employers to take on staff, leading to job losses, the ACCA warned.

Last year, the Government introduced the Regulatory Reform Act, aimed at reducing bureaucratic burdens on businesses. But the British Chambers of Commerce said regulations introduced by Labour since its election in 1997 have cost businesses £15.06bn.