Many small business owners doubt the new Government’s ability to free them from the shackles of red tape, according to new research. A study found that just 28% of small to medium-sized enterprises (SMEs) believe the Tory/Lib Dem Coalition will make a noticeable difference to the rules and regulations they face.

A sizeable 40% of respondents said they did not think the Coalition will significantly reduce the amount of legislation small firms have to comply with. The remaining 32% said they did not know whether or not the Government would achieve its stated aim of regulation reduction.

Many members on the panel also submitted comments outlining why they doubted the Coalition’s ability to cut red tape. The main reason given was the historical failure of similar initiatives in the past but an overwhelming 89% of those surveyed said they felt that legislators do not understand how regulations affect small employers.

Others claimed that civil servants and other policy-makers would get in the way of Tory attempts to streamline UK workplace law. The Government’s reliance on the leaders of large corporations for advice on business regulation was also a concern.

Traditionally, there’s always been a lot of support for the Conservative party among small business owners, so you would expect them to have a fair amount of faith in the Coalition’s pledge to cut red tape. However, it would appear that many small firms feel as though we are now past the point of no return with legislation – there’s a sense that because there’s so much of it and it’s so deeply embedded in our legal framework, any attempts to tackle it are doomed to failure.

The level of change required – around a 50% reduction in terms of the time business owners spend on completing forms – is unlikely to be met without a radical rethink of legislation.

Other findings from the survey included:

  • Employment law emerged as the area of most concern among the business owners surveyed. In particular, respondents said they wanted to see more simplicity, certainty and consistency in the legislation governing treatment of employees
  • The regulations surrounding taxation appeared to be the second biggest concern for SMEs, with a high volume of firms calling for the time and costs they spent on tax-related issues to be reduced
  • Overall, the complexity of business legislation proved most controversial among panel members
  • Environmental legislation was seen as overly complex but overall less problematic than other areas of legislation.

Additionally, many businesses on the panel said they concentrated on ensuring they followed what they considered to be best practice in the workplace, rather than simply aiming to fulfil their legal obligations.

Some pointed out that with large sections of the legal framework untested in a court of law, it was more practical option for them to adhere to what they considered to be best practice, rather than trying to understand and interpret ambiguous areas of the law.