ja_mageia

Europe's favourite think tank website
  • Narrow screen resolution
  • Wide screen resolution
  • Decrease font size
  • Default font size
  • Increase font size
Home Economy blogs Holding back recovery
Holding back recovery Print E-mail
Written by Charlotte Bowyer   
Tuesday, 09 February 2010 06:00

The government has struck a clear line on the economy heading into the election, vowing that it will be the party to guide Britain tenderly through the steps of recovery, nurturing new jobs and fostering enterprise. Nothing could be further from the truth.

In contrast to this rhetoric, the latest research from the British Chambers of Commerce shows that proposed employment legislation would cost businesses £25.6bn in new taxes and regulations if they are but into effect. ‘Employment legislation: holding back recovery?’ is a timeline that breaks down the plethora of the costs of proposed regulations between 2010 and 2014. Amazingly, these estimates are lifted straight from the government’s own Impact Assessments, so in all likelihood the unintended financial consequences would prove to be even higher.

What is interesting is that only two of the new proposals will be EU legislation; sixteen will be coming directly from the UK government. While the EU-enforced Agency Workers Directive is set to cost business nearly 1.5bn a year, the rise in NI contributions will cost a staggering 4.7bn a year, and the Pensions Reforms in 2010 4.8bn. None of these regulations are even attempts to make British firms more productive, competitive or attractive; not a good idea and at a time when the private sector doesn't need it.

This £25bn won't even be reaching the treasury to fix the gaping hole in our nation’s finances. Much of the estimated cost represents lost opportunities, such as the closing down of a venture and the decision not to expand or start one up to begin with. Given the colossal national debt, the government shouldn’t be wasting our money dreaming up wasteful Keynesian initiatives and adding ever more regulation to an already fragile economy.


blog comments powered by Disqus
 

Words of wisdom

"There is no art which one government sooner learns of another than that of draining money from the pockets of the people."

The Wealth of Nations, Book V Chapter II Pt II

 

"What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable."

The Wealth of Nations, Book I Chapter VIII


About the ASI

The Adam Smith Institute is the UK's leading innovator of free-market economic and social policies. Politically independent and non-profit, the Institute promotes its ideas through reports, briefings, events, media appearances, and its website and blog. For further information, click here.

rss180
facebook180
twitter180
youtube180

Join our email list

Email info@adamsmith.org if you would like to subscribe to our fortnightly e-bulletin.

Support the ASI

Enter Amount: