Survey reveals SMEs’ red tape woes

Excessive regulation is a bigger gripe than access to finance for small businesses

Survey reveals SMEs' red tape woes

Timing is everything, or so the old saying goes, and we couldn’t help but notice how one aspect of the Queen’s Speech – delivered yesterday – seemed a convenient response to a survey from energy firm E.ON, released on Tuesday. 

Of course, we all know that Her Royal Highness’s annual presentation of incoming legislation is drafted months in advance, yet the announcement of the new Deregulation Bill still appeared rather timely in light of figures from E.ON showing that 73% of Britain’s SMEs feel stifled by excessive red tape. Its survey of 750 small business decision-makers revealed that, despite ongoing economic difficulties, the biggest boost to business prospects would come from reduced bureaucracy and simpler tax systems rather than improved access to finance or better interest rates. A closer inspection of the stats shows that professional services and construction appear to suffer most with a respective 82% and 76% of respondents from those sectors identifying red tape as the biggest threat to their development. They are followed by manufacturing/light industrial (72%), catering (71%) and retail (59%). 

So whilst almost half (45%) of small business owners in the UK remain optimistic about the country’s economic fortunes, they are of the firm belief that the chances and speed of recovery could be enhanced if the government takes a look at making life that tiny bit easier for our start-ups. 

And alas, we were presented yesterday with a piece of legislation which aims to address some if not all of these woes. The government informs us that the main elements of the Deregulation Bill are:

  • Measures which will reduce or remove burdens on businesses and Civil Society and facilitate growth

  • Measures which will reduce or remove burdens on public bodies, the taxpayer or individuals

  • Good legislative housekeeping: repealing legislation that is no longer of any practical use

 Among the highlights, if you will, are:

  • A duty to require non-economic regulators to have regard to the impact of their actions upon growth

  • Reducing the qualifying period for Right to Buy and Right to Acquire from five years to three years
  • Exempting from health and safety law those self-employed whose work activities pose no potential risk of harm to others
  • Removing a power for employment tribunals to make wider recommendations in successful discrimination cases under the Equality Act 2010
  • No longer obliging councils to produce assessments after designating air quality zones

Needless to say, the health and safety proposal has left most of us in the Elite Business completely stumped – we can’t quite see what it is going to achieve. But at least the government is taking some encouraging steps when it comes to easing the burden on our small businesses, including the employment allowance that was first announced by George Osborne in the Budget and is now part of the National Insurance Contributions Bill. Easier access to traineeships and apprenticeships is also something not to be sniffed at. The future is thus beginning to look a little bit brighter, but it could be a while yet before the sun is truly shining on our sparkling start-ups. 

Adam Pescod
Adam Pescod

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