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More regulation fears for SMEs

Published On 5 April 2007 at 12:20:43

New regulation could have a detrimental effect on the productivity of small and medium-sized enterprises (SMEs) this summer, according to a new report.

The Forum of Private Businesses (FPB) warned that the Work and Families Act will put additional pressure on SMEs.

Under the new regulations, mothers of children born after April 1st 2007 will be entitled to Statutory Maternity Pay (SMP) for 39 weeks, rather than for the 26 weeks the law previously guaranteed.

"The extension of SMP could be a problem for many small businesses that fear they will be left holding the baby if workers decide to take extended leave," said the FPB's campaigns manager, Victoria Carson.

"Big businesses can quite easily replace members of the workforce without serious consequences; however this is not the case for small firms with highly-skilled, specialised or experienced workers."

Similarly, the FPB warned that regulatory changes designed to encourage flexible working practices could seriously harm SMEs.

"Under the new regulations, the right to request flexible working - which was previously available only for parents of children under six or under 18 if the child is disabled - will be extended to carers of adults. There is a danger that some businesses could as yet be unaware of the changes or may not know how to deal with such requests," Ms Carson explained.

According to the British Chamber of Commerce, British businesses have spent £38.9 billion in dealing with red tape since the Labour government came to power in 1997.

 

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