03/10/11

Commenting on George Osborne’s speech at the Conservative Party Conference, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

“The measures announced by the Chancellor at the Conservative party conference will be welcomed by many businesses. Reforms to the employment tribunal system and rules around unfair dismissal, investment in new infrastructure to deliver growth across the UK, and new policies to get credit flowing to firms are all good news for business.”

“Investment in infrastructure, be it in transport, digital or energy networks, is crucial to delivering growth across all regions in the UK. The new Enterprise Zones will also help to stimulate growth in those regions affected most by the cuts by BAE Systems. Credit easing could help solve the problems in delivering much-needed credit to businesses, but the devil will be in the detail as to how this could work. These are all announcements that will give businesses confidence, who will be encouraged by Chancellor’s focus on driving the recovery through a prosperous and enterprising private sector.

“While we welcome the Chancellor’s proposals for stimulating business growth, it is important that they are delivered promptly. What business needs now is to see the words of the Chancellor implemented so they can feel the benefits of a growth agenda.”

On the deficit-reduction plan:

“Businesses will welcome the Chancellor's commitment to reducing the deficit, which is vital to stabilising public finances and boosting business confidence. However, with the UK facing a weak economic recovery, and concerns over the future of the Eurozone and global demand, the government should commit to a Plan A+. We believe that there is room within the current spending envelope for further measures to stimulate business growth and contribute to recovery. Only a strong and prosperous private sector will allow us to provide the public services we all want and need. The government needs to be prepared to introduce a package of measures this autumn to strengthen business confidence, allowing companies to grow, invest, export, and create jobs.”

On reforms to the employment tribunal system

“A recent BCC survey showed that a staggering one in five businesses have been threatened with a tribunal claim in the last three years. When faced with a tribunal, a large proportion of small businesses opt for settlement since the cost is lower than defending a claim. This drives a culture of settlement, encouraging spurious claims and undermining the cases of those employees who have a fair claim to compensation, and acts as a brake on growth and jobs.

“We have long supported the principle that claimants should have to pay a fee to access the tribunal system. Claims are endemic, and though fees will help they will not, on their own, be enough. The government must cap proposals to force firms who lose a case to pay a punitive levy to the Treasury, and reform the rules to force tribunals to award firms costs when a claimant has acted in a malicious manner.”

On the extension of the unfair dismissal qualifying period:

“In our survey of over 2,000 small businesses, more than one in two see dismissal rules as extremely or fairly burdensome. We support the move to increase the qualifying period for unfair dismissal from one to two years. This will give many companies the confidence they need to take on more staff. The government is acting quickly to implement this change, and it is an important sign of its commitment to reducing the burden of employment-related red tape However, this is only a first step and the government can go further in making it easier for businesses to take on staff.”

Ends

Notes to editors:

The British Chambers of Commerce (BCC) is the national voice of local business.

The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce, serving over 100,000 businesses across the UK, which employ over five million people.

Media contacts:

Liz Larvin
Tel: 020 7654 5813 / 07825746812
Email: l.larvin@britishchambers.org.uk

Lisa Morrison
Tel: 020 7654 5812 / 07717682221
Email: l.morrison@britishchambers.org.uk