The Confederation of British Industry (CBI) has outlined recommendations for improving the quality and volume of business regulation for UK business regulations. This is an important part of the business landscape which can drive growth, but can also cost small businesses huge amounts of money and time, as well as creating red tape that is hard to navigate through. Too much regulation means small and medium enterprises can be constrained, with growth strangled and progress slow.
The CBI has recently released its new report, ‘Changing the rules – eight steps to a better regulatory regime’, calling on the government to get a hands on grip on the red tape coming from Whitehall and having a negative effect on many small businesses. This report believes that ‘urgent action’ is needed to tackle an ‘ingrained’ culture of inconsiderate regulations that can impact on business performances.
This report shows that the net added cost on UK businesses will increase by £177.7 million as a result of new regulation policies created in 2011. One of the most worrying statistics is that for every £3 of costs removed by the government, an extra £5 of cost has been added through new regulatory measures. Of course, the right regulation can have a positive effect on the economy and growth, but too much can also create a major barrier. The Autumn Statement contained some welcome action against excessive regulation, but there’s still a long way to go.
A CBI Spokesman commented: “Small and medium-sized businesses are the engines of growth, but they’re telling us they are drowning under the weight of extra regulation, layered on top of outdated red tape which has not been repealed.’ The coalition government needs to address this mass of red tape, removing barriers that could limit the ability of SMEs to drive growth in the economy.