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David Frost, boss of the British Chamber of Commerce, has attacked the government for heaping employment law red tape onto a business community already suffering from the credit crunch.

Frost called for a three year moratorium on new regulation, and said British small businesses didn't need handouts but did need to be left alone by government.

Frost also criticised Harriet Harman's equality legislation, introduced yesterday, which he said would discourage job creation and add to employers' fears about recruitment and employment law. The bill will force all companies with more than 250 staff to publish annual average salaries for male and female staff.

He said: “The government commitment not to introduce mandatory gender pay audits until 2013 is not worth the paper it is written on. 2013 does not feature in the Bill itself so the government could easily withdraw this commitment and implement audits much earlier.

“Coupled with the 50 per cent tax rate, this sends a poor message about doing business in the UK.”

Shadow business minister Ken Clarke told the BCC conference a Tory government would avoid adding to the tax burden on small business. He described Lord Mandelson's talk of "industrial activism" as "worthy waffle".

Clarke also said he had doubts about the government's "cash for bangers" scheme to offer subsidies to encourage people to buy new cars. He said he feared it would move sales forward a few months leading to a later slump.

A recent BCC survey found 58 per cent of members intend to freeze wages this year - 12 per cent intend to cut salaries. ®

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