Red tape strangles Britain

published 8 June 2006

What a surprise, said Martin Vander Weyer in The Sunday Telegraph: the Government's Small Business Service is a waste of money. According to the National Audit Office, the SBS (which controls an annual £2.6bn for small business initiatives) has failed to make sense of the 3,000 local and regional small-business support schemes or to gain influence over the fifteen Governmental departments that have any say over the sector.

It's also failed to tackle the burden of red tape that now forces struggling entrepreneurs to spend an average of 28 hours a month filling in forms. Along with higher taxes, red tape has reduced business investment to a record low of 9% of GDP, from a peak of 14% in the 1980s. The Government's "vast regulatory assault course" includes ever-changing VAT rules, the recent inflation-busting minimum wage, Dispute Resolution Regulations that make sacking workers almost impossible, and longer maternity leave.

There are now 120,000 personnel managers, compared with 12,000 in 1979: "vivid" evidence that we are "strangulating employment, except for those in HR", says John Blundell in The Business. Half of Britain's new employment rules, such as the Working Time Directive, were imposed by Brussels and we've followed them to the letter. The UK labour market is still more flexible than the continent's, but given the Government's "true mantra" is "regulation, regulation, regulation", it may not be for much longer.