HC Deb 22 July 2004 vol 424 cc508-9W
Mr. Bellingham

To ask the Secretary of State for Trade and Industry whether her Department has made an assessment of the cost to small businesses of changes to employment legislation introduced since 1997. [185543]

Mr. Sutcliffe

The DTI estimates the potential impact on small businesses of changes to employment legislation in its Regulatory Impact Assessments. Summing these estimated costs to all businesses of employment legislation introduced since 1997, produces a figure of £5.1 to £5.6 billion a year of policy costs (such as the cost to employers of paying the national minimum wage), but just £32 to £39 million per year of on-going 'implementation' costs (the administrative or 'red-tape' costs). Small firms might account for £1.5 to £1.6 billion of the policy costs and £9 to £11 million of implementation costs. At the same time, it should be remembered that there are very significant benefits to small firms associated with these changes to employment legislation.

The DTI has also commissioned research into what the effects on small firms of changes to employment legislation have been. The impact of employment legislation on small firms: a case study analysis, by Paul Edwards, Monder Ram and John Black, 2003 for the DTI, found that "the impact on firms appears generally to remain relatively small."

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