09/05/12

Commenting on the Queen’s Speech, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

“Business has said time and time again that the government must choose between boosting the economy or playing short-term politics. Businesspeople and voters understand that the economy must come first, especially given continued uncertainty across the eurozone.

“On balance, business will welcome some of the government’s proposed legislative measures, but express serious reservations about others. Positive steps such as reform to employment tribunals and red tape reductions could be undermined by complex new burdens around shared parental leave, for example.

“Ministers could have been bolder by including legislation to establish a British business bank, to further simplify dismissal rules, and to progress the construction of our high-speed rail network. While there are clear wins for business in the government’s programme, ministers are wasting parliamentary time on House of Lords reform and other politically-motivated measures, rather than on more support for growth and jobs.”

John Longworth’s comments on particular issues arising in the Queen’s Speech can be found below:

On banking/finance (Banking Reform Bill):

“In broad terms, we support the aims of Sir John Vickers’s recommendations on ring-fencing. There is a need to strengthen the UK’s banking system and make it easier for business customers to punish poor service or take their business elsewhere. However, the Banking Reform Bill put forward here does not include a fully-fledged British business bank, which we believe is necessary to address the finance gap facing many companies, particularly high-growth businesses and new borrowers.”

On executive pay (Enterprise and Regulatory Reform Bill):

“Businesses must be able to reward good performance. Conversely, there should be no rewards for poor performance. But these responsibilities should be exercised by companies’ non-executive directors and remuneration committees, in the interests of shareholders. Shareholders themselves must also hold boards to account.”

On regulation and red tape (Enterprise and Regulatory Reform Bill):

“We welcome the commitment to reduce regulatory burdens on business, and to limit the number of inspections that businesses face. These are steps in the right direction. Firms value positive, constructive interaction with regulators, but not un-coordinated inspections and punitive enforcement. If these proposals remove red tape and lessen the amount of time businesses spend on compliance, they will be welcomed by companies across the land.”

On employment Tribunals (Enterprise and Regulatory Reform Bill):

“We warmly welcome the government’s commitment to reforming the employment Tribunal system, particularly the introduction of fees for claimants and efforts to ensure that fewer bogus claims are even considered in the system.

“However, we need to be sure that these new fees result in a reduction in the number of cases employers are faced with year-in, year-out. One in five companies has been threatened with a Tribunal in the last three years, according to BCC’s own member research, and this puts companies off hiring. So we will be watching closely to ensure that this number diminishes, and fast.”

On flexible working (Children and Families Bill):

“The government has decided to expand the right to request flexible working to all employees, not just those with children under the age of 17. In doing so, they have ignored the clear view from business that no additional regulation was necessary. Companies are already agreeing flexible working with employees on an informal basis, and new regulation will only lead to unintended and perverse consequences, such as risk-averse behavior and less hiring. The evidence is clear: there’s just no need for this new regulation.”

On shared parental leave (Children and Families Bill):

“Ministers have chosen to ignore the fact that a complex new system of shared parental leave brings fiendish complexity and huge uncertainty for employers across Britain. These proposals will hit business at precisely the time ministers are asking companies to create jobs and spur growth.

“While most businesspeople identify with the idea of gender-neutral parental leave, they’ve warned time and again that the government’s proposals are unwieldy, difficult to understand, and fraught with potential complications.”

“Businesses may now be exposed to endless appeals, legal challenges and grievances. The government has promised to cut red tape, but continues to tinker with employment legislation, bringing uncertainty and costs to businesses. If shared parental leave is introduced the government must ensure that the possible patterns that can be requested are limited to reduce complexity, by limiting requests to chunks of one month or more.”

On high-speed rail (no bill):

“Business is hugely disappointed that the government has not progressed enabling legislation for the next phase of high-speed rail in the Queen’s Speech. HSR is vital to the future competitiveness of the UK, and the government must ensure that this is delivered quickly and efficiently. While Britain dithers over infrastructure, others do. The government must not be allowed to duck the facts. Our railways are nearly full, our roads require investment, and we lack a clear aviation strategy. These facts must be addressed swiftly, no matter how uncomfortable they may make ministers when they go out to seek votes on the doorstep.”

On utilities (Energy Bill and Draft Water Bill):

“If the UK is to secure the investment needed to upgrade its energy infrastructure over the coming decade, we must have an electricity market that provides predictability and stability for both investors and businesses. As ministers progress with electricity market reform, they must get the design of the new system right, and take the needs and cost concerns of both existing and future businesses into account.

“Business would have preferred stronger and more immediate action on water to extend the benefits of competition to companies across England and Wales, who presently do not benefit from the choices available to businesses in Scotland.”

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. For more information visit: www.britishchambers.org.uk

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