Less red tape means more jobs and greater productivity

Tuesday 22 May 2012

Company bosses may be able to boost business productivity if they spend less time battling bureaucracy, it has been suggested.

Simon Walker, director general of the Institute of Directors, said radical action is necessary to cut the "severe burden" of red tape on employers.

"The current system is so restrictive that it deters companies from hiring new staff," he stated.

"In extreme cases firms are going under because redundancy procedures take too long."

Mr Walker claimed that excessive labour market regulation discriminates against people seeking to enter the workforce.

"There are a million young unemployed people who are losing out because employment law protects existing employees at their expense," he stated.

This is one reason why Spain has youth unemployment above 50 per cent, Mr Walker stated.

If businesses are able to employ more people, they may be able to raise overall productivity and increase their profit margins.

In turn, this can help gross domestic product growth and make a positive contribution to the UK economy.

Posted by Dan Smith