Red Tape Freeze needed to Boost Economy
The Government must freeze new business regulation and simplify existing red tape if it wants to create new jobs and tackle rising unemployment, the Federation of Small Businesses (FSB) has claimed.
The FSB said an overhaul of the UK’s existing regulatory framework could give the economy a second economic stimulus, and urged the Government to cut “confusing bureaucracy” which it said was stifling growth.
The business lobby group has also called for the Government to freeze all new regulation during the recession and for eighteen months after recovery.
FSB chairman, John Wright, warned that the burden placed on businesses by “unnecessary regulation” should not be underestimated in the current economic climate.
“Around half of all firms planning to close or downsize were influenced in that decision by the heavy impact of regulation,” he said. “However, we know that small firms want to employ more staff and the Government should be making it easier for them to do so, especially as we pull ourselves out of recession and into recovery.”
Research by the FSB found that many small firms are feeling the brunt of heavy red tape, with 27% saying they wanted to expand, but were put off because of complicated regulation. Almost a half (41%) admitted they found compliance with laws difficult.
Maternity and paternity law, discrimination legislation and health and safety all needed urgent simplification, the FSB said, adding that employers should be given clearer guidance on legal responsibilities to save time and cut unnecessary paperwork.
However, a spokesman for the Department of Business, Innovation and Skills (BIS) said that the Government had already made clear efforts to reduce bureaucracy for small firms, and stressed that improvements would continue.
“As part of creating the best environment for small businesses we have simplified legal requirements, and adopted common-sense risk assessment when inspecting low-risk businesses,” he said.
“We are also looking at how small firms can be exempted from new and existing regulation to further lighten the burden, while still ensuring safety and protection for employees and consumers,” added the spokesman.