The UK’s five million small firms will welcome the government’s plans to slash red tape, says the Federation of Small Businesses (FSB).
Proposals outlined by Business Secretary Vince Cable this week to reduce legislation were always likely to please the FSB, which has long complained about the profusion of red tape occupying small businesses. The coalition government is adopting a “one-in, one-out” policy, whereby the burden of any new legislation will be offset by the abolition of a piece of existing legislation, creating a new Cabinet Star Chamber whose purpose is to identify regulations that can be axed, and reviewing all legislation due to go onto the Statute books.
Red tape was the second most common reason given for businesses shutting down
According to research by the FSB, half of businesses planning to downsize said excessive regulation was a primary cause. Red tape was the second most common reason given for businesses shutting down, the first being retirement.
Also, 27% of small businesses that wanted to expand said that new legislation due to come into force was causing them to rethink.
Mike Cherry, policy chairman of the FSB says, “Regulation has long been stifling business growth so these plans to put an end to the excessive legislation that choke small businesses is welcome news. It is a real victory that our calls to simplify the regulation system have finally been heard.
“Small firms have repeatedly said that the burden of regulation and the time it takes to comply with is just too much and could prevent them from taking on staff – and stunts economic growth.”
“We now need to see the Government give detailed plans as to how these will take affect so that small firms can get on with growing their business, rather than spending precious time filling in forms to say they will do just that.”
