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The British Chambers of Commerce has warned that changes to paternity leave and retirement rights introduced this week will damage the start of the UK recovery.

From yesterday British men will get up to six months paternity leave, if their partners return to work early. And from Wednesday the default retirement age is retired.

But business lobby groups complain this is just more red tape for firms to deal with, despite coalition promises to reduce the burden of regulation.

Just over half of businesses surveyed by the BCC expect extra paternity rights to hurt their business and 34 per cent fear the changes will be extremely detrimental. A fifth of firms are worried by changes to the retirement age. The BCC spoke to 1,300 UK companies.

David Frost, director general of the British Chambers of Commerce, said: "In the face of promises by the Government to listen to the needs of business and cut red tape, these two new pieces of employment regulation will hit businesses hard. The Budget revealed a policy to exempt start-ups and existing firms with fewer than 10 employees from new domestic regulation. But this week's changes show there is an urgent need to review and scale back policies already on the statute books."

Frost said if the government was serious about reducing regulation it should consider exempting a wider range of companies. He said unless practical steps were taken, the barriers to job formation would remain in place.

The BCC's full statement on retirement and paternity changes is here.®

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