By Maximilian Clarke
The Forum of Private Business is calling on Trade Union Congress (TUC) leader Brendan Barber to apologise to small business owners following comments in which he accused employer organisations of pursuing a ‘fanatical right wing agenda’ that does not reflect the concerns of their members.
Mr Barber’s comments followed an announcement by Nick Clegg today (Tuesday) in which the Deputy Prime Minister revealed the Government is set to cap workplace inspections for small companies to just two per year to cut back on red tape.
Referencing a survey from the Department for Business, Innovation and Skills (BIS), Mr Barber said employment law and health and safety regulation “do not even feature in [small and medium-sized enterprises’] list of concerns” and accused employer organisations of “pursuing a fanatical right wing agenda that does not actually reflect the concerns of their members.”
In response, the Forum’s Chief Executive Phil Orford pointed to ample evidence that bureaucracy is a major issue for the organisation’s small business members.
“No one is disputing whether regulations should exist to protect people, or that these rules should not be properly enforced, but it is important for small business owners and the economy that we remove the unnecessary barriers to job creation and economic growth they create,” said Mr Orford.
“There is a huge amount of evidence that this is the perception of small businesses. It is entirely right that we should be pursuing a deregulatory agenda in order to free firms from red tape wherever possible, particularly in the areas of tax, employment law and health and safety.
“It simply doesn’t follow that the wellbeing of staff, customers and members of the public will necessarily be jeopardised by looking at ways we can achieve this.
“To dismiss the well-meaning concerns of employer organisations as pursuing right wing fanaticism and paint all businesses as predatory cowboys is outrageous and insulting to hard-working business owners who take their corporate responsibilities seriously.
“And we are saying that loudly and clearly on behalf of our members, both employers and sole traders. Mr Barber should apologise for his ridiculous comments.”
Research carried out by the Forum in July indicates that the annual cost of compliance for the UK's smaller employer is £16.8 billion — more than £14,000 per firm on average.
In all, 84% of Forum members reported an increase in time spent complying with legislation since 2009, when the not-for-profit organisation's previous ‘cost of compliance' Referendum survey took place.
According to the survey administering tax has become the top regulatory burden for small business owners. Tax-related regulation was deemed to be the most costly area of red tape, leaving smaller employers with a bill of £5.1 billion per year.
Employment law was second at £4.2 billion, followed by health and safety law at £3.8 billion.
One in five Forum members surveyed feel that the time and cost they spend on compliance has resulted in poorer business performance. In all, 18% believe it impacts on the motivation and even health of employees and 5% feel that compliance hindered employment opportunities in the future.
Further, employment law was the single biggest issue for business owners calling the Forum of Private Business's legal helpline during a five-week period in September and October, which included the 1 October ‘common commencement date' when new regulations come into force.
The Forum's most recent legal helpline figures show that a significant 65% of calls received during the period were queries about employment law, dwarfing the next biggest issue — ‘general business enquiries' — which prompted just 14% of calls from members. The terms and conditions of business contracts came third, comprising 10% of all legal helpline calls.
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