RSS feedsOne of Gordon Brown’s first acts as prime minister was appointing John Hutton as secretary of state for business, enterprise and regulatory reform and, in turn, Lord Drayson was appointed minister for business and regulatory reform. After years of requests from businesses and trade bodies alike, UK plc has a department to deal specifically with the task of improving the regulatory framework in which they must operate.
Research has shown that red tape is one of the biggest sources of anger and frustration as well as cost for small businesses. The British Chambers of Commerce revealed that the cumulative cost of regulation on British business had risen to £55.6bn, up from £44.8bn on the previous year.
Yet despite the clear signals from government that it intends to simplify the regulatory regime for business, Bank of Scotland research shows that 75% of Britain’s entrepreneurs expect the regulatory environment for SMEs to become more, rather than less, burdensome over the next three years. And nearly 60% believe that the need to comply with regulations and legislation is preventing their business from maximising its performance.
Assessing the impact
While there is clearly a need for some regulation, particularly in health and safety procedures, there must be a more detailed assessment of the impact that regulations are having on SMEs.
The problem most frequently cited by business leaders is the lack of distinction between a small business and a large business when it comes to the introduction of new rules and regulations. Often, small business owners will have to take responsibility for red tape when they should be focusing on driving the business forward.
But no matter how slick and efficient we, as suppliers, make our services to small business, there will never be a step change in attitude towards regulation until the system is simplified. The Department for Business, Enterprise and Regulatory Reform has promised, among other things, to make employment law more straightforward for all parties and ease the burden on low-risk businesses dealing with health and safety legislation. It has also promised widespread consultation on continuing reforms, inviting businesses to have their say. It’s a good start, but small business owners across the UK will take some convincing.
Mark Curran is head of Bank of Scotland Business Banking
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