The government’s efforts to cut red tape have had “little or no impact on British businesses”.
This is according to new figures from business information firm Croner, which found that just 7 per cent of firms surveyed said the government’s measures have had some impact. Some 52 per cent of firms surveyed said the government’s measures have had “no impact” on their business, while a further 41 per cent said they were not sure what impact the changes had made.
The survey comes three years into the government’s so-called ‘Red Tape Challenge’, a programme under which the coalition pledged to amend or scrap thousands of regulations. Last month David Cameron promised that the coalition “will be the first government in modern history to have reduced – rather than increased – domestic business regulation during our time in office.”
But the Red Tape Challenge has been met with scepticism not only from businesses but also from unions. In a speech to the Federation of Small Businesses in January, the Prime Minister announced that a further 3,000 regulations would be cut – a move that he claimed would save businesses £850 million a year. But unions reacted angrily to the proposals, suggesting that they would make workplaces more dangerous.
TUC General Secretary Frances O’Grady said: “The real problems facing small businesses are an economy that has been slow to recover due to austerity economics and the continuing failure of the banks to lend.”
According to the Croner report, business owners also remain unconvinced by the changes. Responses to their survey included: “I am not aware of one regulation that affects us that has been repealed”, “as far as I’m concerned regulation and employment laws only increase”, and “everything seems as complicated as it’s always been.”
Croner’s Richard Smith said: “There hasn’t been the bonfire of regulations that the government promised. Many of the reductions are in areas that touch [businesses] infrequently, or have been repackaged into consolidating legislation. That’s because much of the drive towards regulation is EU driven and therefore there is very little that the UK government can do to change those laws.”
But the EU has also been responsible for reductions in regulatory burden in key areas. The widely lauded small business accounting exemption, for example, was introduced in order to bring the UK into line with new European rules.
Simply Business CEO Jason Stockwood maintains that the government is not doing enough on red tape. While he welcomed the introduction of the accounting exemption, he pointed out that the change originated from the EU, and called on the government to go further to ease the regulatory burden on small businesses.
“The government has pledged to reduce the burden of unnecessary red tape for small businesses,” he said, “but research from the Chartered Institute of Accountants in England and Wales shows that nine out of ten business owners do not believe that the regulatory system has improved in the last year.
“The government is clearly not doing enough to help entrepreneurs.”
The Cabinet Office, which is overseeing the Red Tape Challenge, has now published an infographic detailing the “big wins” from the campaign. These include changes to vehicle tax discs, and licensing exemptions for live music and community events.
What do you think? Is the government doing enough to cut red tape? Are you worried about changes to regulations? Let us know in the comments.