Small businesses are still being badly restricted by petty rules and regulations, despite chancellor Gordon Brown’s promise to cut red tape, a new study has found.
Profiles of 45 businesses by the Institute of Directors (IoD) found that many were hindered by unnecessary regulations, misplaced assistance and incompetence by authorities.
The IoD said that red tape existed across all areas of business activity, from employment law, to planning to health and safety rules.
The research will be a blow to Brown, who was keen in his last Budget to state his pro-small business credentials by promising to slash red tape and improve the support on offer to entrepreneurs.
Examples in the IoD study include a Lincolnshire manufacturer forced to replace equipment to comply with EU rules, but then told by a supplier that the replaced equipment was of higher quality; and a West Midlands exporter who has to pay Business Link to help him trade overseas, rather than do it directly himself.
Red tape has long been the biggest irritation to startup firms, with regulations estimated to cost UK businesses £30 billion a year.
James Walsh, of the IoD, said that the case studies speak volumes about the difficulty of doing business in Britain today.
“For many companies, red tape makes the difference between expanding the business and standing still.
“The government has made some encouraging noises about getting to grips with red tape, but we need practical action,” he said.
