Red tape 'will stifle small firms'

The government’s claims that 2006 would be the ‘year of delivery’ on cutting regulation and red tape for business have been shot by figures showing the burden is actually increasing.

Citing an “incredible rate” in the growth of compliance laws on small businesses, the British Chambers of Commerce estimates the cumulative cost of regulation since 1998 at £55.6bn.

According to the group’s Burdens Barometer, the recurring cost of red tape cost business an extra £1.6billion last year, rising to £10.3bn from £8.7bn in 2005.

The figures mean policy makers have a “long way to go” in actually cutting back the excess burden of doing business in the UK, the chamber said.

While for owners of small firms, the impact of net increases to lashings of red tape will result in their “competitive edge [being] blunted on the global stage.”

The group cited the £6.6 billion it has cost UK Businesses to comply with the Data Protection Bill as a particularly burdensome regulation.

“Despite talking tough on regulation this year’s figures are once again painful reading for business,” said Sally Low, a director at the BCC.

“The UK’s growing burden of red tape is unsustainable and economic success cannot be taken for granted. Unless this increase is curbed we risk significant damage to the competitiveness of UK companies.

Francis Chittenden, co-author of the Burdens Barometer, said that "2007 needs to be a year of action not words" from the nation's policy makers.

“These figures show that Government rhetoric about listening to business concerns and reducing the burden of regulation is just that,” he said.

“The burden of regulation on business continues to grow unchecked and we predict this will continue until the Government machine has a complete rethink about the objectives that it is trying to achieve.”



 

27th February 2007

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