Business leaders raise Equality Act cost concerns

Representatives of British industry are warning the government to be careful of the amount of new legislation that is accompanying the Equality Act, amid fears that many businesses may not be able to afford it.

The new Equality Act came into law today, October 1, bringing with it a raft of new employment laws - including raising the minimum wage by 13p to £5.93 an hour and paying apprentices a minimum of £2.50 an hour.

David Frost, the director-general of the British Chambers of Commerce (BCC), said, however, the £11.3 billion it will cost firms between now and 2014 is a dangerous sum - and one that goes against the Conservatives' election promises to slash red tape.

“If private sector businesses are to offset job losses in the public sector, the significant costs of employing people must be reduced," he explained. "As austerity measures start to bite, companies need the flexibility and freedom to boost employment and drive our economic recovery."

He said the prudent measure would be "putting the brakes on any costly new employment law coming into force during the life of this Parliament."

The Institute of Directors also spoke out against certain parts of the legislation, criticising in particular the new right to flexible working hours for parents of under 18s.

A spokesman said, "This is particularly unwise when we know that creating another formal employment right would add to the already excessive amount of administration businesses have to conduct to comply with regulations."