Regulatory requirements are a key concern for small businesses and the time is ripe for changes to the UK’s regulation system, according to FSB, which is launching its latest policy report today.
Long before the pandemic and the country’s exit from the European Union, small businesses were struggling to manage the regulatory changes they were expected to keep across on a day-to-day basis.
Since a new EU-UK trade deal took effect, 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.
Off the back of the findings, FSB is recommending a British Columbia style regulatory system, which would help to capitalise on the opportunities that withdrawing from the bloc presents.
In the early 2000s, the Province underwent huge changes to their regulatory system which saw unnecessary rules and bureaucracy slashed, while crucially ensuring other regulations were clear to understand, helping to spur productivity.
The reforms saw the regulatory burden, including the slimming down of paperwork that small businesses need to complete for different parts of government, reduced by a third.
FSB is urging the Government to learn from the British Columbia model, appointing a minister to be accountable for the Government’s regulatory reduction programme, alongside:
- A public central database of all regulatory requirements, with a league table showing departmental progress against the one third reduction target.
- On reaching the one third target, installation of a ‘one-in, one-out’ or ‘one-in, two-out’ rule regarding new regulations.
- Widespread reform of regulation culture within the UK, moving the country towards simplified regulations and regulatory requirements, and reinvigoration of Departments as they undertake regulatory impact assessments on new proposals.
FSB Development Manager for Hampshire, Dorset and Isle of Wight, Nicola Bailey said: “For years small businesses have looked to government to finally act when it comes to the cumulative burden of regulations that impact them day in day out.
“While new regulatory requirements may appear to make sense in isolation, the cumulative burden on small businesses has grown over time, which is why FSB is calling for reforms that would mean the UK would adopt the successful model used by the Canadian province of British Columbia.
“Around 90 per cent of small firms are negatively affected in some way by regulations, and it’s time that we change the way the regulatory environment works for us all.
“This report highlights the benefit of looking at successes around the world, and adopting them for the UK. A model like the one used in British Columbia could reap huge benefits for small businesses right across the country.
“The work done there has allowed businesses to boom, and as we look beyond the pandemic, it’s time we followed its example.
“It’s important to note that we aren’t calling for regulation to be slashed wholesale, we are rather proposing a new and sustainable way forwards that will benefit both small businesses as well as the wider economy with a reduction of regulatory requirements in the UK regulatory framework.
“We need to seize on this opportunity to cut unnecessary regulations and open up the economy in a way that will benefit small businesses for generations to come.”