Red tape putting one in three small businesses off growth

One in two small businesses downsizing or closing have cited red tape as a major reason, new research shows. And 27% of those who want to expand are put off because of bureaucracy, a survey from lobby group the Federation of Small Businesses (FSB) found.

It's urging the government to simplify processes and scrap any plans for more regulation ahead of the Conservative Party Conference this week. According to the government figures, 60% of small companies believe excessive paperwork inhibits success.

FSB national chairman John Wright said: "We cannot and must not underestimate the burden that unnecessary regulation puts on small businesses."

The lobby group reckons 258,000 jobs could be created if businesses were more able to flourish, free of the bane of red tape. A further 55,500 could be saved.

"The FSB is urging the Government to give the UK's regulatory environment a strategic overhaul, to provide it with what will amount to a second economic stimulus, to boost growth and employment," said Wright.

The group is calling for a moratorium on business regulation. It says 'to boost the chances of job creation, the government must halt all new regulation during the recession and for the first 18 months after recovery'.

It also wants 'accelerated simplification of current laws: employers are currently confused and put off by maternity and paternity law; discrimination law; and health and safety legislation. All of these must be immediately simplified'.

We hope the government - present or future - starts implementing these simplifications as soon as possible. Small businesses simply cannot wait any longer.

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