[Pounds Sterling]14,000 Red Tape Bill for Every Firm; despite Its Promises, Coalition Is Piling on Even More Rules and Regulations
Byline: Simon Duke Banking Editor
BRITAIN'S businesses are spending up to [pounds sterling]14,200 each to comply with the growing thicket of government-inspired rules and regulations, a survey revealed yesterday.
Despite promising to eliminate red tape, the Coalition is piling ever greater amounts of paperwork on small and medium-sized companies, according to the Forum of Private Business.
The blizzard of rules and regulations - much of them created by the last government but some still emanating from the Coalition - includes administering complex changes to tax codes, maternity benefits, paternity leave and health and safety legislation.
This growing burden now costs up to [pounds sterling]17billion a year and threatens to hamper the ability of businesses to create jobs and kick-start Britain's faltering economic recovery.
In a quarterly health check of British business, the FPB found that 84 per cent of firms are spending more time complying with rules and regulations than in 2009.
And in a damning indictment on the Coalition's red tape-busting pledges, nearly seven out of ten companies have to resort to expensive outside advisors to navigate the ever more complex rulebook.
The FPB estimates that the cost of avoiding legal pitfalls amounts to [pounds sterling]16.8billion per year - with a colossal [pounds sterling]5.8billion going to outside consultants and contractors.
The outlay is equivalent to more than 1 per cent of Britain's entire economic output, or an average of [pounds sterling]14,200 per firm.
More alarming still is the [pounds sterling]29.8billion of business opportunities that firms have missed because of the time and money they have to spend on dealing with regulations, according to the FPB.
The soaring cost of red tape will exacerbate the huge pressures bearing down on small businesses, which are the bedrock of Britain's economy.
In an escalation of the credit drought facing entrepreneurs, lending to British businesses plunged by [pounds sterling]2.5billion in June, according to figures published by the Britremain ish Bankers' Association yesterday.
In a blunt message to Chancellor George Osborne, the FPB said the 'legal requirements placed on smaller employers have increased since the Coalition came to power'.
Jane Bennett, of the FPB, said: 'Despite several government initiatives - some more effective than others - it is clear that we are heading in the wrong direction. …