Gift Focus inc Attire Accessories - Page number 87 - November/December 2021

87 BUSINESS The FSB’s National Vice-Chair Martin McTague discusses unnecessary regulation and the importance of a reduction target For years, small businesses have looked to the government to overhaul the cumulative burden of regulations that impact them on a daily basis. The sheer number of regulatory hoops that must be jumped through just to operate is one of the biggest concerns for those running their own small firm. Undoubtedly, this was already a huge burden long before the pandemic and the country’s exit from the European Union, and one that has continued to grow. Since a new EU-UK trade deal took effect, our FSB research found around a fifth of small firms say they have a reduced understanding of the regulations they are faced with in the round, with almost 40 percent struggling to understand new rules linked to fresh arrangements with the EU. At the height of the pandemic, additional demands kept on coming, with more regulatory requirements imposed on small firms – sometimes inadvertently. When the Government rolled-out workplace testing, for example, it required business owners to provide their company number before signing up. This disproportionally impacted smaller firms, many of whom are not incorporated, shut sole traders out of the system and left smaller employers at risk of losing customers due to delays caused by having to retrieve this number. The same requirement has resurfaced in the Government’s Help To Grow initiative, reducing its reach. It’s often the case that new regulatory requirements seem to make sense in isolation, but the cumulative burden on small businesses just keeps growing. With businesses currently trying to get back on their feet, things need to change. Our research into these regulatory pressures led us to look at other places that use altogether different systems. In the Canadian province of British Columbia, the regulatory burden was reduced by a third in only three years, including the slimming down of paperwork that small businesses need to complete for different parts of government. In the early 2000s, the province underwent huge changes to their regulatory system. Unnecessary rules and bureaucracy were slashed, while crucially ensuring other regulations were clear to understand. The work done there has expanded across Canada and allowed businesses to boom, and as we look beyond the pandemic, it’s time we followed its example. On this side of the Atlantic, our Government is instead clobbering businesses with three different tax hikes on national insurance and dividends, and so making it more expensive to set up and run a small business or start-up as self-employed. The team at FSB is urging the Government to learn from the British Columbia model, asking them to appoint a Cabinet-level minister to be accountable for the Government’s regulatory reduction programme. We are also calling for a public central database of all regulatory requirements, with a league table showing departmental progress against the one third reduction target. Competition between businesses drives innovation in the private sector, and there’s no reason that competition between government departments shouldn’t drive deregulation in the public sector. Regulations should be introduced only when other avenues won’t work, not as a default policy response. To stop the regulations building up once the one third target is reached, there should be a fresh look at a ‘one-in, one-out’ or ‘one-in, two-out’ rule approach to bring some discipline into new regulations. Of course, we are not calling for regulation to be slashed altogether. Small businesses understand the need for clear regulation, but what they don’t understand is the bewildering number of individual requirements that they are subjected to. We are therefore proposing a new and sustainable way forwards that will benefit both small businesses as well as the wider economy with a reduction of requirements in the UK regulatory framework. As small businesses work hard to recover from a difficult past 18 months, we must take the opportunity to cut unnecessary regulations and open up the economy. ABOUT FSB As the UK’s business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed. FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at www.fsb.org.uk. Yo u can follow us on twitter @fsb_policy and on Instagram @fsb_uk. REGULATION RULES