Gary Williamson: Cut red tape and let firms lead the way out of recession

On the other hand, if you are an employee who is protected from exploitation through working time limits or the minimum wage, then red tape is a good thing. And it can be, but it is about finding the right balance, and ensuring that regulation protects and supports both businesses and workers without inducing a bureaucratic fuelled headache.

New research from the British Chambers of Commerce shows that upcoming employment regulation and taxes which will be introduced over the next three years will end up costing UK businesses an extra 25.6bn between now and 2014.

In Yorkshire and the Humber, that would equate 1.9bn – which is on top of the 5.7bn that compliance has already cost our region's businesses since 1998.

Although the economy has now returned to growth, full recovery is still a significant way off and conditions remain uncertain. So what will the effect be of these incoming regulations? And how much will it cost small businesses?

One possibility is that it could slow down recovery, but it could be the tipping point of an already fragile recovery and trigger a double dip recession, fuelled by further job losses.

Leeds, York and North Yorkshire Chamber has compiled its business manifesto, which outlines the key policies that we believe must be delivered over the next Parliament to support business, because it is the private sector that will drive economic recovery and create the wealth to fund job growth.

We will be using the period prior to the election day to meet the political parties and would-be MPs, putting forward the manifesto's policies to ensure that the business voice is listened to and acted upon. Our objective is that Yorkshire's prospective MPs fully understand the role that local business plays in the prosperity of our great towns and cities.

Our key policy recommendation is for the next Government to make business success its number one priority. The one per cent rise in National Insurance contributions will cost our region in excess of 1bn over the next four years and is clearly a tax on jobs at a time when employment creation should be a top priority. How ridiculous does this appear against the backdrop of increasing unemployment locally?

What politicians and the electorate must realise is that any extra costs placed upon businesses could affect their jobs and the economy. Research shows that SMEs spend one week of every month complying with Government regulation alone. This is not productive and seriously affects businesses' profitability and investment opportunities.

The harsh reality is that if an employer is forced to pay an increase in National Insurance or pension contributions, then that money has to be found from somewhere and one solution could be the cutting of jobs. We need all of the political parties to realise this because increased unemployment will result in a loss in tax revenue and additional JSA claimants – at a time when they are trying to reduce a huge financial deficit.

This year, the Right to Request Time to Train legislation for large businesses will be introduced, followed by the same legislation for small businesses in 2011.

Similarly, in 2012, Pension reform will take place which will see employers have to contribute three per cent of the value of an employee's wage into a qualified pension scheme. Neither of these policies should have been introduced in the present economic climate.

While the Chamber usually supports any initiative that encourages businesses to increase the skill of their workforce, we are concerned that the extra cost to businesses of complying with the regulation will switch employers off from the skills agenda.

Surely, a more effective means of encouraging employers to train their workforce would be to offer fiscal rewards through non-legislative measures such as tax breaks and funding because constant use of the "stick" has never been an effective motivational tool?

The Government needs to trust businesses to do the right thing by their employees because any good business wants to be seen as an employer of choice and have the pick of potential employees who want to work for them.

Over the next four months, the Chamber will be seeking a pledge from all of the prospective MPs that they will lobby their parties for a moratorium on additional employment regulations being announced in the next parliament.

From what our members tell us – and in this region alone they directly employ more than 500,000 local people – they want to get on with creating wealth and jobs to lead this region out of recession.

They just need the Government to get off their back and let them get on with it.

Gary Williamson is chief executive of Leeds, York and North

Yorkshire Chamber of Commerce.