By Daniel Hunter
Companies are unaware of the efforts Government is making to reduce regulation and the majority do not think that the UK regulatory environment has improved in the last year, according to the latest ICAEW Enterprise Survey.
Now in its 17th year, the survey found that 7 out of 10 businesses are not familiar with the ‘one in, two out’ policy, under which the government pledges to remove two rules for every one rule introduced. Of the 3 in 10 who have heard about the policy only 13% believe it will reduce the regulatory burden. More ominously for government is that 90% of businesses think that the UK regulatory environment has not improved in the last 12 months.
“Regulation remains a substantive concern, with many companies feeling the burden of regulatory requirements," Clive Lewis, ICAEW Head of Enterprise, said.
"This is not to say that businesses see all regulation as bad, but they are yet to feel the benefits made by government. For this reason we want government to redouble its efforts on deregulation so business see and feel an impact."
Some red tape is causing businesses significant problems. Half of businesses (50%) see pensions regulation as a challenge to the operation and development of their business with 14% citing it as a major hindrance. Just under half of companies believe employment tax (46%) and employment legislation (44%) as ‘bad’ regulation and a major problem. SMEs are more concerned about employment tax than large businesses. These smaller businesses put it in joint first together with pensions regulation (both 49%) as ‘bad’ regulation.
Other kinds of regulation are clearly far less of a challenge to companies. ‘Good’ regulation which is seen as a help to companies includes business tax changes (36%), reflecting recent cuts in corporation tax, as well as company law (20%) and equal opportunities legislation (16%).
Despite the red tape challenge, the number of businesses projecting growth in turnover for the next year has increased significantly since last year (2013 — 69%, 2012 — 54%). New businesses* are the most optimistic with 52% predicting turnover growth of 10% or more. This is in stark contrast with older, established companies with 7% projecting growth at those levels.
The top three objectives for businesses in the next 12 months are to increase turnover, profit and grow cash reserves.
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