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July 01, 2011

Small firms called on to “blow the whistle” on excessive red tape

Small-business owners have been called on to “blow the whistle” on excessive red tape following the launch of a new Government initiative.

Part of the Government’s Red Tape Challenge, the scheme invites small firms and their staff to come forward with real-life examples of how multiple inspections and conflicting advice might be getting in the way of running a business.

Business minister Mark Prisk said the Government had already taken steps to “reduce the burden that regulation places on our businesses,” but admitted more needed to be done.

“Inspections and enforcement are the most noticeable way in which business experiences regulation. The Red Tape Challenge has already highlighted a number of ways in which compliance problems are getting in the way of businesses, but we weren’t getting enough information on the problems,” he added.

The Challenge had been extended to the end of August, he added, in order to enable business owners to inform the Government about “the good, the bad and the ugly side” of regulations.

According to the Federation of Small Businesses (FSB), red tape was one of the most difficult challenges faced by small firms. Any attempt to reduce the legislative administrative burden was “warmly welcomed”, it said.

However, the business group said that despite the coalition’s pledge to cut red tape, major regulatory changes had been introduced since May last year, such as the extension to paternity leave and pay, and the removal of the Default Retirement Age.

Further changes on pensions, flexible working and paternity and maternity laws were also on the agenda over the next few years, said an FSB spokeswoman, which could cause potential headaches for small firms.

“Our research found that increased regulation created difficulties in expanding for 27 per cent of businesses, while 33 per cent said regulation is the biggest potential obstacle to growth, only behind cashflow and the recession,” she added.

The Red Tape Challenge was launched by the Government in April this year, giving the public the opportunity to have their say on more than 21,000 regulations.

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