News

November 12, 2010

Less than a third of firms believe red tape reduction pledge

Less than a third of small businesses believe that the Government will reduce red tape as it has pledged, Forum of Private Business (FPB) research has found.

An FPB focus group of 50 small-business owners found that only 28 per cent expected the Government to make a noticeable difference to business regulations and rules. The business group said that this was representative of a broader trend among small firms.

The findings come despite the Government setting up the Reducing Regulation Committee earlier this year, which pledged to review regulation and enforce a “one-in, one-out” system to ensure that a rule is only brought in when an equally onerous law is removed.

FPB research manager, Thomas Parry, said that it was surprising that such a small proportion of firms expected the Government to follow up on its pledge. “Traditionally, there’s always been a lot of support for the Conservative party among small-business owners, so you would expect them to have a fair amount of faith in the Coalition’s pledge to cut red tape,” he said.

“However, many small firms feel as though we are now past the point of no return with legislation,” he added. “There’s a sense that because there is so much of it, any attempts to tackle it are doomed to failure.”

The respondents cited employment law as the most burdensome area of regulation for small-business owners, with tax law the second biggest concern.

A Department for Business, Innovation and Skills (BIS) spokesman said that firms may be sceptical because previous Governments did not deliver on their promises.

“Previous Governments have said they will reduce red tape and it hasn’t been enforced, but this time we really have strong backing from secretaries of state and across departments to reach our goal,” he said.

“We have created a new Committee to make sure that the ‘one in, one out’ policy is adhered to and to review every piece of legislation that goes through Parliament to see if there is an alternative, such as a code of practice,” he added. “Businesses may not have seen the effects of this yet as we have not long been back from parliamentary recess, but they will do soon.”

He added that the Government is reviewing all the regulations passed by the last Government which are still to be implemented and that regulatory impact assessments are also being taken more seriously.

• Business groups welcome Government plans to reduce red tape
• Red tape freeze needed to boost the economy, says FSB