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Warning over equality measures cost

The cost of implementing new equality regulations will "far outweigh" their benefits, a thinktank report has claimed.

The report from Civitas suggested that the burden on business of complying with last year's Equality Act will hold back Britain's growth and cost jobs.

Official assessments of the Act suggest that it will save between £102-£134 million in its first year and £25-£87 million annually after that, quickly earning back the estimated £241-£283 million one-off cost of its introduction.

Over 10 years, the impact assessment produced by the Government Equalities Office (GEO) suggests the Act could save a total of between £40 million and £674 million.

But Civitas statistician Nigel Williams argued that many of the claimed savings are "largely imaginary", and that the cost of introducing the changes will be far higher than predicted.

The Equality Act was one of the final pieces of legislation introduced by the former Labour administration and came into effect over the last year. It streamlined existing anti-discrimination laws with the aim of banning unfair treatment and achieving equal opportunities in the workplace and in wider society.

Mr Williams said that much of the financial gain ascribed to the Act comes from an assumed benefit to society in general from greater equality, which is estimated at more than £62 million a year. The GEO assessment argues that this benefit is generated by putting money in the hands of disadvantaged people, who are likely to spend it - thus boosting growth - rather than save it, as wealthier individuals might.

The report dismisses this estimate as "ideological", arguing that no money is produced or saved by the "feeling of well-being coming from a belief that differences between people have been reduced".

Estimating that the Act will in fact impose an annual cost of at least £10 million on the economy, Mr Williams said: "The ideological benefits of the Equality Act are debatable at best. The financial benefits simply do not exist."

A Home Office spokesman said: "The Equality Act replaced nine different laws and allowed us to scrap more than 100 burdensome regulations. We are protecting individuals from unfair treatment without creating unnecessary red tape and simplifying the system to make it fairer for employers and employees. We do not accept the Civitas assessment."

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