Government's pro-business credentials under attack

The UK Labour government has again been facing strong criticism from employers' groups over increasing business regulation, particularly in the area of employment legislation. In a speech to the British Chambers of Commerce conference in early April 2000, the trade and industry secretary sought to allay employers' concerns about "red tape".

In late March, in the run-up to the annual conference of the British Chambers of Commerce (BCC), which represents small and medium-sized enterprises, Chris Humphries, director general of the BCC, said that there was "growing disillusionment" within the business community about the "new" Labour government's pro-business credentials, leading to newspaper headlines that the government's "honeymoon with business" was over. Employer criticism of the government reflects a number of factors, including adverse reaction to increases in public expenditure in the budget announced on 21 March and the continued strength of sterling. However, increasing business regulation, particularly in the area of employment legislation, continues to be a central concern for employers' groups (UK9909131N).

In a speech to the BCC's annual conference on 4 April, the trade and industry secretary Stephen Byers acknowledged employer group's concerns about "red tape", stating that: "Reducing the burden of regulation is central to building a better business environment." He said that the government had to ensure decent minimum standards in the workplace but must also give employers flexibility and keep administrative costs to a minimum. In particular, Mr Byers announced that Regulations to implement the EU Directive (97/81/EC) on part-time work (EU9712175N) had not yet been finalised following consultation (UK0002153N) and would therefore not be in place by the due deadline - 7 April 2000. He said that employers would be given an eight-week acclimatisation period between publication of the final Regulations and their entry into force. Mr Byers is also reported to have promised a review of employment tribunal procedures.

The government announced in March that it was undertaking a review of maternity pay and parental leave provision (UK9912144F), taking account of the views of both working parents and businesses. This is thought likely to include consideration of the case for paid parental leave, despite opposition to the idea from employers' groups. Ministers are reported to believe that paid parental leave can be "business-friendly". Another possible reform reportedly being examined within the government is giving mothers returning to work after having a child the automatic right to part-time employment. This proposal has been publicly rejected as unworkable by both the Confederation of British Industry (CBI) and the BCC.

A further area of concern for the CBI and BCC is the proposed EU charter of fundamental rights, currently being drawn up by an EU-level "convention" chaired by Roman Herzog, the former president of Germany (EU9910202F). Both organisations have recently expressed fears that such a charter may be a vehicle for further EU social regulation which would damage labour market flexibility in the UK. The UK government is thought to share some of their concerns.

Lord Haskins, chair of the government's Better Regulation Task Force, told the BCC conference that UK business needed "a sensible regulatory environment which strikes a fair balance between the proper protection of consumers, workers, investors and the environment - and the costs and time incurred, especially by small businesses, in complying with regulation". He accepted that regulation had a disproportionate impact on small businesses and that the transposition of EU Directives into UK law was often particularly problematic, but commented that, overall, business in the UK is "less regulated than any other major OECD country" except the USA.

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