Survey shows cost of regulations to business

The British Chambers of Commerce (BCC) recently published 2009 Burdens Barometer shows that the cumulative cost to business of new regulation since 1998 has risen to £76.81 billion. This is a jump of over £10 billion from last year.

There is a positive note to this year’s Barometer with 18 regulations since 1998 now producing a total saving for business worth £1.4 billion. This is evidence that the government’s better regulation agenda is beginning to do its job, say the BCC. However, considering the current financial pressures on many firms, much more needs to be done to immediately reduce the overall burden.

With business cash-flow being severely squeezed and many good firms going bust, the uncomfortable truth is that despite three Acts of Parliament designed to reduce the regulatory impact, the steady increase continues.

In 2007/08, companies were hit with 19 new regulations costing them £1.75 billion.

The two most burdensome regulations in the Barometer are:

Working Time Regulations 1999. To date this has cost business £17.8 billion with a recurring annual cost of £1.8 billion.
Vehicle Excise Duty (Reduced Pollution) (Amendment) Regulations 2000 (EU Pollution Directive 98/69/EC). To date this has cost business £10.4 billion with a recurring cost of £1.2 billion.

Commenting David Frost, Director General of the BCC, said: “Businesses are facing the toughest economic environment for a generation. Company cash-flow is being squeezed and unemployment is growing as a result.

“The government needs to get serious about reducing the massive burden of regulation on business. Cutting unnecessary burdens and announcing a moratorium on new regulations set to come in this year, is one way of providing instant and inexpensive help to British firms.”

Professor Francis Chittenden of Manchester Business School, said:“After more than a decade of uncontrolled and often ineffective regulation, government must build on these welcome early signs of improvement by introducing regulatory budgets to contain the flow of new burdens on business.”

Commenting on the survey the TUC general secretary Brendan Barber said: “I suppose we should be grateful that the BCC haven't added in the cumulative costs of the abolition of slavery and stopping children cleaning chimneys.”