Small businesses suffer red tape headache

Sales expectations of small business owners have sunk to their lowest level in over five years and many believe too much of their time is taken up with bureaucracy and paperwork, a survey has claimed.

Figures from the Small Enterprise Research Team (SERT) reveal small businesses anticipating an increase in sales has fallen from 35 per cent in the first quarter of 2003 to almost zero per cent during the same period this year. SERT also claimed that 88 per cent of small businesses feel the Government lacks the understanding to regulate them effectively.

A total of 61 per cent of respondents claimed they now spend longer on complying with regulations than they did five years ago with the same amount declaring they spent an average of 5.4 hours per month on paperwork. That number increased to 9.7 hours for business owners who are sole traders.

The Forum of Private Business highlighted the fact that Prime Minister Gordon Brown brought in 2,823 laws in his first year in office. This represents a 17 per cent increase on the yearly average of 2,663 passed under his predecessor Tony Blair and is 63 per cent more than Margaret Thatcher's average of 1,724.

A recent FPB survey revealed its members spent an average of 14 hours a month dealing with health and safety red tape. The FPB claimed it was concerned the Government might not be on course to meet European Union target of cutting red tape by 25 per cent within two years.

Representative Phil McCabe said: "It is clear from the SERT research that small firms are feeling vulnerable and less optimistic about the future. The research also highlights the growing feeling among smaller businesses that the endless amount of paperwork they have to process is a significant barrier to growth."