The Confederation of British Industry (CBI) have warned the government about the dangers of over-regulation in the current economic climate.

Mr Lambert, director-general of the CBI, cited the axing earlier this year of plans for regulatory budgets to curb red tape across Whitehall as an alarming indication that ministers could add to the high regulation burden already felt by companies in the UK.

"We know that in a recession, when government ministers don't have any cash, they regulate instead," said Mr Lambert.