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Business regulation resistant to change

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Many businesses think that government efforts to reduce business regulation will be ineffectual.

That is the finding of a new survey by the Forum of Private Business (FPB).

According to the poll, some 28 per cent of respondents believe that the coalition government will make a noticeable difference to the rules and regulations that businesses face.

However, four out of ten said they did not think the coalition will significantly reduce the amount of business legislation.

The remaining 32 per cent on the FPB’s Red Tape research panel said they did not know whether or not the government would achieve its stated aim of regulation reduction.

The main reason given for scepticism over red tape reduction was the failure of similar initiatives in the past.

Some 89 per cent of respondents also blamed legislators for not understanding how regulations affect small employers.

The government’s reliance on the leaders of large corporations for advice on business regulation was also a concern.

Thomas Parry, the FPB’s research manager, said: “It would appear that many small firms feel as though we are now past the point of no return with legislation – there’s a sense that because there’s so much of it and its so deeply embedded in our legal framework, any attempts to tackle it are doomed to failure.

“The level of change required – around a 50 per cent reduction in terms of the time business owners spend on completing forms – is unlikely to be met without a radical rethink of legislation.”

Employment law emerged as the area of most worry among the business owners surveyed. In particular, respondents said they wanted to see more simplicity, certainty and consistency in the legislation governing the treatment of employees.

The regulations surrounding taxation was be the second biggest concern for SMEs, with a high volume of firms calling for the time and costs they spend on tax-related issues to be reduced.

Environmental legislation was seen as overly complex but less problematic than other areas of legislation. 

Some businesses pointed out that, with large sections of the legal framework untested in a court of law, it was a more practical option for them to keep to what they considered to be best practice, rather than trying to understand and interpret ambiguous areas of the law.