Employment regulation costs to exceed £23.8 billion in next four years

The cost to British employers of a raft of new changes to employment law in the next four years will amount to more than £23.8 billion, according to the British Chambers of Commerce (BCC).

The industry body said that pension reforms are set to prove most financially punishing to business, with compliance costing £4.5 billion annually. The forthcoming Agency Workers Regulations (AWR) - which are to be introduced in October 2011 - will cost £1.5 billion, while awarding workers the right to have time off for professional training will come at a cost of £174 million.

The BCC's director-general, David Frost, said it was imperative for the Government to "act on its promises" to stimulate growth through cutting regulatory burdens on the private sector.

"The Government claims business growth is top of the agenda, yet UK firms will be hit with huge costs once these new regulations come into force," he said. "Unless the Government reduces this kind of red tape, we will continue to have high levels of unemployment and could end up derailing the recovery."

Mr Frost added that recent changes - such as the abolition of the default retirement age and increased flexibility for paternity leave - were causing employers to be distracted from growing their businesses.