Select Committee on Trade and Industry Minutes of Evidence

Supplementary memorandum by The British Chambers of Commerce

  During our comments to the Committee in an evidence session we made several promises to the Chairman to come back with specific information, which I cover here:

  1.  We promised to send the Committee a copy of Proudfoot Consulting's survey Lost Time—The Global Productivity Study, which I duly enclose[4]. My apologies, but this is our only copy, which has been annotated in several places. I thought the Committee might find it useful in terms of its analysis of various issues around planning, management, process and staff morale.

  2.  At the end of our evidence John Peel offered to organise a tour of his supply chain if the Committee would find that helpful. I enclose some further details on what John envisaged.

  3.  Several members of the Committee asked about our Burdens Barometer and I thought they might find it helpful if I set out in more detail how it is put together, which I have done in a separate note.

  4.  We said in response to a question from Sir Robert Smith that we would investigate whether we had any statistics on the proportion of manufacturing firms that rely on exporting manufacturers' supply chain activity. I am afraid the only statistics I know of that might be helpful come from some NIESR research, which using input/output tables and individual company data, Pain and Young (2000) estimate that 3.2 million jobs (12 per cent of whole economy employment) are now associated directly with exports of goods and services to the EU.


  The main message that our small business members convey to us is that it is not each individual regulatory burden that they find hard to cope with, but the cumulative total. We designed the Burdens Barometer to express this cumulative figure, by adding up the costs of regulation over the course of a parliament, using the Government's own Regulatory Impact Assessments (RIAs).

  RIAs predominantly sub-divide the costs of a regulation into two categories: non-recurring costs and recurring costs. Typically, a regulation will have a non-recurring administrative cost—the cost of businesses learning a new law for example. There will then often be a combination of recurring administrative costs and "policy" costs. An example of the former would be record keeping, and of the latter, the cost of additional paid leave in relation to working time legislation.

  In calculating the Burdens Barometer there is not double counting. Recurring costs, as their name suggest, occur each year and thus need to be counted each year to give a fair impression of the burden imposed on business.

  The Burdens Barometer is originally calculated to take account of a full five-year term of Parliament. This we see as the best reference point for expressing in one figure the cumulative cost to business of the regulation that a government has introduced. Because of the recurring costs some future reference period has had to be chosen. The alternative, as the Committee suggested at our evidence session, would be to calculate the Barometer from year to year, but because of the non-recurring costs the figures could fluctuate significantly and would not give a particularly good indication of the cumulative burden, which is the main business concern. In time, more natural reference points will occur, for example as power passes from one government to the next and we will then be able to compare track records.

  The table below shows in more detail how we derive the figure of £15.06 billion.

BCC Burdens Barometer

  The figures below show the government's own estimates of the compliance costs on a series of regulations affecting business up to May 2002. One of the greatest burdens to business which has been added this year is the Data Protection Directive which will represent up to May 2002 a burden on business of £3.1 billion. It is possible that this figure will increase with the current revision of the Data Protection Directive to include the processing of personal data and the protection of privacy in the electronic and communications sector.
MeasureIntroduced One-off
Admin Cost
Admin Cost
Total Cost
by May 02
Trade Union RecognitionEaster 2000 4 million 7.8 million
Ordinary Maternity LeaveDecember 1999 2.7 million 7.4 million
Wider entitlement to
Additional Maternity Leave
December 1999 21 million50 million
Paternal LeaveDecember 1999 28.8 million 62.2 million
Extended to births before
Dec 99
April 2001 6.39 million 22.5 million
Right to time off for family
or domestic grievances
December 1999 6.9 million20 million
Right to be accompanied
in dispute or grievance
Easter 20002.3 million 4.5 million
Part Time Workers Directive—
includes Fixed Term Work
April 2000

27.4 million
142-342 million
306 million

National Minimum WageApril 1999 50-54 million85-330 million See Note674.5 million
Stakeholder Pensions & Welfare
Reform Bill
April 2001140 million 15 million per
year per million
with stakeholder
314 million
Working Time DirectiveNovember 1998 1.8 billion to
Nov 98
2.3 billion from
Nov 99
7.65 billion
Working Families Tax CreditApril 2000 40 million100 million 262.8 million
Student Loan Repayment*April 2000 40-80 million in
first five years
125-210 million
non recurrent
cost 14.3 million*
14 million*255.8 million
Young People—Time off for
September 1999 60-130 million,
which will include some admin costs
273 million
Fire Precautions RegulationsDecember 1999 2.3-28.2 million 50 million
European Works CouncilsDecember 1999 14.5 million 43 million
IR 35April 200017.5 million 6 million475 million in
2000-01 and 300
million thereafter
523.5 million
Data Protection Directive 95/46/ECOctober 1998
phased over 3 years
836 million630 million 3.1 billion
Regulation of Investigatory Powers
Acts Parts I and III
July 2000 40 million
Disability Discrimination Act 180-225 million59-265 million 364 million
EU Pollution Directive 98/69/ECJan 2001 and
Jan 2006 **
980 billion-
1.47 billion
1.6 billion
15.06 billion


*  Student Loan repayments. The figures are taken from Tables 2 and 3 of the Draft Regulatory Impact assessment summary of cost and benefits entitled "non-recurrent costs of employers years 2000-01 and 2001-02" and "recurrent costs of employers years 2000-01 and 2001-02" respectively.

**  The European Directive relating to measures to be taken against air pollution by emissions from passenger cars and light commercial vehicles. This Directive prescribes tighter emission limits for vehicles and is being introduced in two broad stages—for vehicles entering into service from 1 January 2001 and for those entering service from 1 January 2006. Tightening of emission limits by some 30-40 per cent is prescribed for petrol cars and the lightest class of petrol vans and by up to 50 per cent for diesel cars and lighter diesel vans from 2001.

  National Minimum Wage figure does not include the recurring financial cost per year of the NMW (£2.4 billion).

Where the government's compliance cost assessments have given ballpark figures BCC has taken the median.

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