The coalition government has been criticised for its reform of employment law.

According to Alexander Ehmann, head of regulatory affairs at the Institute of Directors (IOD), while the state may believe it is cutting red tape, no effect is occurring in reality.

Speaking to the Daily Telegraph, he described the changes being made by the Conservative-Liberal Democrat alliance as a "gimmick".

"It's the Emperor's New Clothes. The moratorium exists but it hasn't been applied to anything. Unless it is applied to something it is meaningless," said Mr Ehmann, who suggested the coalition could be set to lose credibility unless it implements employment law reform.

John Walker, chairman of the Federation of Small Businesses, added companies are still waiting to see the impact from the government's promises to cut red tape.

Business secretary Vince Cable recently hailed the importance of finding the right balance in employment law.

He was quoted by the Eastern Daily Press as saying workers must not be afraid of rules and regulations.