More jobs will be created in the UK if the red tape holding back many of the nation's employers is reduced or removed completely, one body has asserted.

The Institute of Directors (IOD) says that the government needs to take radical action to remove the hurdles preventing firms from increasing headcount, in order to stimulate headcount.

This week, Adrian Beecroft's independent report on employment law called for the scrapping of restrictive employment legislation, in order to enable growth across UK business.

Simon Walker, director general of the IOD, said Mr Beecroft's recommendations are "encouraging", and noted that the government should back them strongly.

Mr Walker added: "The current system is so restrictive that it deters companies from hiring new staff, and in extreme cases firms are going under because redundancy procedures take too long. Less red tape means more job."

According to Phil McCabe, senior policy adviser at the Forum of Private Business, the UK government expects small businesses to create jobs and drive economic growth, but greater tax and red tape incentives are needed to encourage such developments.

22/05/2012 15:24