EARLIER this year, the Dragon's Den panellist and entrepreneur James Caan was highly critical of the way in which government had been creating unnecessary rules for small businesses in the UK.
In a wide-ranging assault on the destructive nature of red-tape in the economy, he suggested that many of the regulations were nonsensical and overly-bureaucratic, such as requiring a pounds 35 poisons licence to sell toilet descaler or ant killer and needing an alcohol licence to sell chocolate liqueurs.
He also noted that there were barriers to getting businesses off the ground and creating jobs. For example, whilst opening a new warehouse in Germany took only four months, he claimed that the delay in Britain could be as long as 18 months, thus dis-incentivising potential investors.
Whilst some in government circles dismissed his comments, they will not be a surprise to many businesspeople and lobbying groups.
Recent surveys from the Federation of Small Businesses (FSB) have suggested that small firms spend as much as two days per week dealing with compliance and legislation, whilst a report from the British Chambers of Commerce concluded that the perception of many small firms was that they were being increasingly choked by government regulation.
The result, of course, is that this burden of excessive red tape can often affect the potential job-creating ability of many firms, with entrepreneurs spending a disproportionate amount of their time dealing with paperwork rather then creating wealth and employment in the economy by seeking new customers, developing new products or services and growing their business.
With politicians looking to kick-start the economy, it is surprising that reducing and streamlining the regulatory process is not as much of a priority as it could be. To be fair to the UK Government, it has begun to address this issue although many will argue that the process is still taking too long and is not filtering through to other levels of government, especially at a local and regional level.
That is why, as I argued last week, there are lessons to be learnt from the way in which the 50 state legislatures in the USA are looking to support their regional economies. Whilst they have developed specific programmes to boost the levels of entrepreneurial activity, they are also looking to find ways of reducing the amount of paperwork that local businesses have to undertake, with a significant number of US governors introducing legislation that is focused on reducing the burden on local business.
Of course, the legislative and taxation powers of the Welsh Government are somewhat different to what is found within individual states in the USA but it must be remembered that Cardiff Bay did gain extra powers in a number of areas last year, powers which those of us who supported the Yes campaign were hopeful could be used to create a more vibrant Welsh economy. …