The growth of small businesses in the UK is being held back by red tape and gold plating, warns the Federation of Small Businesses (FSB) and the Foreign Policy Centre (FPC).
The caution follows the launch of a report that examined the extent of gold plating, where legislations do not operate as effectively as they claim, on regulation for UK businesses.
The report discussed if small businesses fail to expand or collapse in the future this would therefore have a huge negative impact on the British economy. The FSB believes that the problem of red tape and gold plating has to be addressed now before it is too late.
Tina Sommer, EU and international affairs chairman at FSB, said: “If regulation is prepared carefully, with implementation and enforcement carried out proportionately, then the protections for workers or the environment can be achieved without putting the economic well-being of the country at risk. That is the challenge that the Government faces and we hope to assist in meeting that challenge. Our small business members cannot afford the failure to tackle the red tape burden to continue any longer.
“Complying with regulations costs five times as much and takes five times as long for small businesses as it does for large firms. Our research has found that two thirds of small firms want to grow in the next five years but half of all small businesses see excessive regulation as a serious barrier to that growth.
“The cumulative burden of regulation on businesses is by far the biggest issue that must be urgently addressed by the EU and UK Government. With so many regulators involved, at local and national level, it is inevitable that no one organisation takes account of the fact that small businesses are being buried in red tape. The red tape tide has to be stopped now,” added Sommer.
Stephen Twigg, director of the Foreign Policy Centre, said: “Better regulation is important not just for economic prosperity but to persuade the public that the EU functions effectively. Government must weigh up the effects of gold-plating carefully – balancing protection of workers with economic prosperity.
“Some member states, the UK included have ‘over-implemented’ EU legislation – which is having a direct, adverse effect on businesses’ competitiveness and economic agility.
“With much new business legislation now originating in Brussels, government and policy makers must improve the way regulations are explained and implemented. If not, the burden of regulation will remain too great for all the wrong reasons,” added Twigg.
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