New employment rules will cost UK businesses £25.6bn, argues the British Chambers of Commerce

Upcoming employment regulations and taxes will cost UK businesses a staggering £25.6bn over the next four years, which could adversely impact on future job creation, argued research from the British Chambers of Commerce (BCC).

As a result the BCC is calling for a three year moratorium on new employment laws in the UK and for the British government to lead a campaign for an EU-wide suspension. “A moratorium would allow the upcoming regulations to bed-in, promote job creation, and help drive economic recovery,” said the business lobby.

Official unemployment figures are expected to surpass 2.5m on Wednesday (January 20), added to that companies are struggling with difficult trading conditions.

The BCC expects eight major rule changes in 2011.

Over half of the £25.6bn will come from employer National Insurance contributions, which will see a 1% increase from April next year, said the BCC.

The cost of employing people must be reduced if businesses are to have the freedom to create jobs and drive economic recovery, said David Frost, Director General of the BCC. “From what employers tell me, they will get on with creating jobs and wealth, but they simply need government to get off their backs and let them do it. A good start would be to abolish the planned increase in National Insurance in 2011 - it’s a tax on jobs and will hinder recovery.”

According to the BCC, some of the most costly regulations in the pipeline include:

2010: The Equality Bill will have a one-off cost to business of £190m

2011: The Agency Workers Directive will have an annual recurring cost to business of £1.5bn

2012: Pensions Reform will have an annual recurring cost to business of £4.8bn