SMEs expect burden of regulation to increase
17 September 2007
Three quarters (74%) of Britain 's entrepreneurs expect the regulatory environment for SMEs to become more rather than less burdensome over the next 3 years, according to new research by Bank of Scotland Business Banking.
The survey findings coincide with the latest figures from the Bank of Scotland Small Business Confidence Index, which reveals that confidence levels amongst Britain 's entrepreneurs have slipped by two points during Q3 2007.
Attitudes towards red tape and regulation
In addition to expectations of an increased regulatory burden, nearly six in ten (57%) entrepreneurs believe that the need to comply with regulations and legislation is preventing their business from maximising its performance.
Two thirds (67%) of entrepreneurs agree with CBI Director General Richard Lambert's recent complaint that "red tape and regulation only serve to dampen entrepreneurial flair" . The same amount also believes that the UK implements European rules more aggressively that it needs to.
And finally, when asked if they could scrap a single piece of ‘red tape’ or a regulation, more small business owners cited health and safety than any other regulation including VAT and corporation tax.
Bank of Scotland Small Business Confidence Index
In line with the recent dip in market conditions, confidence amongst Britain 's entrepreneurs has slipped two points from 48 to 46 over the last quarter. With optimism varying more by location than sector, only small businesses in the South East and the East Midlands have witnessed a rise in confidence, whilst Scotland has experienced a four point decline down from 51 to 47.
By measuring small business optimism across five key economic areas - economic outlook, customer demand, recruitment intentions, predicted turnover growth and anticipated ease of running a business – the Bank of Scotland Small Business Confidence Indexprovides a single figure score for confidence levels amongst Britain's small business owners. The Index runs from 0 to 100 - where 0 is completely pessimistic and 100 is completely optimistic.
Mark Curran, Head of Bank of Scotland Business Banking said: "Whilst the index score has dipped over the last quarter, confidence amongst small business owners is still strong, particularly when it comes to assessing their own growth prospects. The majority of small business owners are still working at near to full capacity with a strong demand for services from their customers.
"However it is worrying to see that, despite demonstrating such strong self-belief, so many of these businesses continue to feel the pressure of regulation compliance. Whilst there clearly is a requirement for a certain level of regulation, the ever-increasing burden of red tape appears to be weighing heavily on the shoulders of SMEs."
