Harris Lipman News

Businesses Seek Less Regulation

03/11/2010

Small businesses are looking for the government to ease the burden of rules and regulations to help them launch new products and services and create jobs. That is the message from a survey carried out by London chartered accountants and insolvency practitioners Harris Lipman, which recently surveyed its small and medium-sized clients on their views on the difficulties businesses faced with red tape.

The new coalition government has talked about reducing the burden of regulation, including the recent appointment of Lord Young as ‘Enterprise Czar’, but there have been few concrete proposals so far.

This was clearly an issue of great concern to Harris Lipman’s clients, with 70 per cent of respondents saying there was too much regulation, compared to 30 per cent who thought the current level was about right. Perhaps unsurprisingly, no-one said there was too little regulation at present.

Overall 14 per cent of respondents said the level of regulation was the biggest problem facing business, similar to the figures for tax levels and rising costs, but some way behind the biggest concern, which remained a lack of new business, highlighted by 54 per cent of businesses as their greatest challenge.

Worryingly, only 32 per cent of businesses felt that regulations were enforced fairly, with 54 per cent saying they were not and the remainder unsure. When it came to the introduction of new regulations, 30 per cent felt that adequate information was provided on forthcoming changes, but 59 per cent disagreed, and just 11 per cent thought there was sufficient consultation, with 78 per cent claiming there was not.

Employment law was considered the most troublesome set of regulations, highlighted by 46 per cent of businesses as their biggest concern, followed by tax and accounts administration (32 per cent) and health and safety (19 per cent). And if the burden of regulation was cut, 71 per cent of businesses said they were either very likely or quite likely to take on more staff, with 65 per cent very or quite likely to launch new products or services.

Harris Lipman senior partner Barry Lewis said: “Despite the economic downturn, many of our clients are holding their own by offering high-quality, innovative products that customers want to buy.

“It is a great shame that many of them feel they are being held back by the burden of regulation and our survey clearly showed that there is the potential to create much-needed new jobs if firms are given the freedom to move forward as they wish.

“I hope that the government takes note and works with businesses of all sizes to reform the system of regulation and make it less onerous.”

Harris Lipman also quizzed the respondents on the wider business picture in recent months. Disappointingly, a huge 81 per cent of them had seen no improvement in bank lending over the past four months while there was a mixed response to the new coalition government – 38 per cent felt they had been better for business than their predecessors, but 19 per cent said they were worse, while 43 per cent said there was no difference.

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