Red tape is 'killing off small firms'

12 April 2012

TONY BLAIR'S red tape watchdog has warned that small firms can no longer cope with the forest of regulation and laws imposed by ministers. Companies are overwhelmed with regulations written by a Government that has failed to understand business, a Better Regulation Task Force report declared.

It also criticised the European Union for rules and demands that are strangling small firms and sapping the energy of larger concerns.

The rebuke comes five years after the Prime Minister set up the watchdog to indicate his determination to cut red tape. But during this time the Government has ignored its comments.

New chief David Arculus, head of the Severn Trent water group, said companies were 'drowning' in red tape. They have to comply with 26 major Acts of parliament governing employment law. Each one of these sets down pages of regulations.

Arculus listed 12 major Acts passed since Blair came to power. 'Employers just can't cope,' he said. The report cites as examples the Agricultural Wages Order 2001, which sets out conditions for farm labourers in 100 pages of technical detail, and the 1998 Data Protection Act, which has 56 pages of instructions.

But business organisations were sceptical about the Government's response to the report. Ruth Lea, of the Institute of Directors, said: 'We have become so cynical about this Government's behaviour. But if the report can do anything to cut red tape, we will be the first to applaud.'

Industry Department officials criticised the findings. 'Basic standards such as the minimum wage and right to paid holidays are not red tape or bureaucracy,' an official said.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in