How long is a piece of Red Tape? Six hours

Small businesses are being tightly bound in Red Tape for six hours a week according to research by the Institute of Directors.

The report claims that the ever-expanding burden of employment regulations is bad for business, bad for enterprise and bad for jobs.

A report, Red tape in the workplace: The re-regulation of the labour market II - the sequel analyses in detail all the major developments in employment legislation since 1997 and concludes that:

• The extra red tape was costly in terms of money. The IoD has estimated that the extra cost of regulation was nearly £6 billion a year. The most expensive regulations related to the Working Time Directive (£2.3bn) and the National Minimum Wage (£2.7bn).
  
• The extra Red Tape was costly in terms of time. An IoD survey showed that members with small businesses spent an average of six hours a week on Red Tape. In addition some members have reported that they have taken on extra staff to cope with the extra paperwork.
  
• Whilst the IoD claims it is unequivocally opposed to discriminating against people on any grounds, the current developments in anti-discrimination legislation could prove quite counter-productive.
  
• The influence of the EU on UK employment law is now very damaging.
  
• The expansion in employment rights has contributed to the explosion in employment tribunal cases.

Ruth Lea, Head of the Policy Unit at the IoD and author of the report, said: "The increased burden of regulation in recent years, along with higher taxes on businesses, is undoubtedly hurting the competitiveness of business and the economy.

"This country has to make a choice between free and lightly regulated labour markets, low taxes, economic dynamism and strong job creation, on the one hand, and intrusive and heavily regulated labour markets, high taxes, economic stagnation and weak job creation, on the other hand.

"There is, in reality, no Third Way. Heavy regulation destroys dynamism. Heavy regulation kills enterprise.

"Extra time-consuming bureaucratic demands distract businesspeople from running their businesses, increase the possibility of litigation, damage businesses and add to costs. Moreover, they discourage job creation."