Red tape to be trimmed - again

In the latest battle over workplace regulation, Minister for Employment Relations Ed Davey confirmed today that employment tribunals will be the first to get the scissor treatment.  'This will make it easier for businesses to hire people,' Davey said at a briefing on employment law. 'They're an expensive system which doesn't have any benefits for employers or employees.' The change means the qualification period for the right to claim unfair dismissal will be extended from one to two years, starting from next year.

It's all part of the 'red tape challenge,' a review of Britain's employment law which the government launched last week. The review promised to identify laws which could be simplified or abolished but at the same time avoid 'watering down' employee rights. Regulations under review include collective redundancy rules and immigration checks.

But the government has come under criticism and has been accused of taking little direction action. Miles Templeman, who stepped down as the head of the Institute of Directors earlier this month, used his final minutes as director-general to warn that the Coalition is 'strangling businesses' and making the red tape nightmare worse. Hardly anyone believed regulations were being reduced, he said, pointing to the Agency Workers Directive which came into force earlier this month. 

Ed Davey, however, said this regulation, which gave agency workers the same rights as permanent employees, was agreed by the previous government, and that the coalition had no choice but to follow it through. 'These pipeline regulations just happened to come into force during our parliament. People are very frustrated about that but there's nothing we can do.'

Britain's businesses are having hard enough time as it is. Figures released by the Office for National Statistics last week show that 20,000 firms have closed in Britain in the year to March 2011. 'Access to finance is the number one issue facing businesses at the moment, especially small businesses, but firms can't avoid the global slowdown too,' Davey said. Of course, others might argue that red tape and bureaucracy is also putting the brakes on SMEs' growth and expansion plans. 

Cutting red tape is a laudable aim, and would be especially welcomed by the nation’s vital cohort of SME’s. But the government needs to back up its good intentions with firm action, or risk losing credibility in the entrepreneur community.