Britain's businesses are expressing frustration with the country's regulatory regime, with a significant majority saying regulators are creating unnecessary problems in their industries. According to a government survey, 96% of respondents reported that regulators are causing issues, while 89% stated that rules and regulations are imposing unreasonable costs. These findings highlight the challenges faced by businesses in navigating the regulatory landscape.
The survey, which received 271 responses, revealed that the regulatory system is often complex, inconsistent, slow, and burdensome, with disproportionate impacts on small and medium-sized enterprises (SMEs). Respondents cited duplication of efforts, with businesses frequently submitting the same information to multiple regulators, as a major problem. This issue is compounded by fragmented responsibilities, inconsistent guidance, and divergence between UK and international standards.
One of the most commonly cited regulations hindering growth is the extended producer responsibility scheme for packaging, which requires brands to cover more of the cost of managing household packaging waste. Businesses also flagged environmental permitting, chemicals regulation, financial reporting, and the administrative burden of complying with IR35 rules on contractor taxation as significant challenges. These regulations are seen as resource-intensive and costly to implement.
Another major concern for businesses is the lack of communication from regulators. Respondents reported receiving limited updates once applications are submitted, leaving them in the dark about completion dates. Delays can range from weeks to years, incurring substantial costs and creating uncertainty for businesses. This lack of transparency and communication is seen as a major obstacle to growth and development.
To address these issues, businesses are calling for simplification and streamlining of regulatory processes, alongside predictable, timely, and transparent decision-making. They also advocate for clear, consistent regulatory guidance, digitization, and proportionate and risk-based regulation, particularly for SMEs. These recommendations aim to reduce the administrative burden on businesses and promote growth and development.
The findings of the survey echo previous research, which estimated that the annual cost of regulatory compliance for SMEs is £36 billion and 379 million hours of their time. The government has pledged to cut this burden by 25% by the end of this parliament, a target that has been welcomed by business groups. However, there are concerns that previous governments have not matched their promises with concrete action.
Business leaders are urging the government to take concrete steps to address the regulatory burden on businesses. They emphasize the need for a thorough overhaul of the regulatory regime, with a focus on delivering growth and reducing the cumulative burden on businesses. The success of these efforts will depend on the government's ability to balance regulatory needs with the need for growth and development.
