May 2005 - Small Businesses Bound By Red Tape
A staggering 91% of the UK’s four million Small and Medium-sized Enterprises (SMEs) report that the amount of time they spend dealing with ‘red tape’ has increased or stayed the same over the last 12 months.
Wednesday, 11 May 2005
Research from Bank of Scotland Business Banking reveals that almost three out of five (58%) of UK small businesses believe the time they spend has actually increased during the last year. Over two-thirds (69%) believe time spent on red tape has increased in the last five years. Just 2% believe time spent on red tape has lessened in the past 12 months.
Far from seeing red tape as having ‘peaked,’ almost three-quarters (74%) of SME owner-managers also believe red tape will continue to increase over the next 12 months. A further 20% think it will stay the same while just 1% anticipate an improvement.
Red tape - from working hours, late payment law and health and safety legislation through to tax and national insurance changes – is taking up more and more of owner-managers’ time. Almost three-quarters (73%) of respondents spend up to 10 hours every week dealing with red tape, whilst 5% spend more than 20 hours each week dealing with it – alone accounting for half a standard working week.
The current business tax system is the most disliked source of red tape for SMEs closely followed by National Statistics Office requirements. In third and fourth place are Health and Safety regulations and Business Rates.
The top four reasons for wanting to scrap red-tape and regulation are that it is viewed as a waste of time, pointless, costly and confusing.
Other findings from the survey of 1,000 UK-based SMEs include:
• The increasing burden of time spent on Red Tape over the past year is felt more by male business owner-managers (61%), than female managers (50%).
• Over three-quarters (79%) of owner-managers over the age of 50 think Red Tape will increase over the next 12 months compared to 63% of those aged 35 or under.
• Business owner-managers in Wales and Newcastle are least optimistic about the future with four-fifths (80%) believing the burden of Red Tape will increase. London businesses are at the other end of the scale with 69% believing red tape will increase.
Kevin Gillett, Head of Bank of Scotland Business Banking, commented: “Working some of the longest hours in Europe, one of the last things small business owner-managers need is an increasing administrative burden. More needs to be done to ensure entrepreneurs are free to do what they do best – helping our economy to grow.”
An unprecedented number of owner-manager state business life is getting tougher. Over two-thirds (68%) of small businesses claim it has become more difficult to run their businesses over the last five years – almost a third (32%) of all businesses surveyed said it had become much more difficult.
Notes to editors:
• Bank of Scotland Business Banking, part of HBOS Plc, doubled its market share in the SME banking sector just two years after Bank of Scotland’s merger with the Halifax. Last year it grew its small business deposit balances by 21%. In addition to offering the ‘best buy’ business current account interest rate of any high street bank, it is rapidly expanding its presence in England and Wales. From June, all 700 Halifax branches will provide Business Banking facilities and will have Bank of Scotland logos on the fascias. The 100 largest branches in England and Wales will also have a Business Banking Manager on hand.
• ORB interviewed a total of 1,000 owners and managers of small businesses throughout England, Scotland and Wales from 18 February – 11 March 2005. Interviews were conducted on the telephone and the statistical margin of error in the data +3.4%.This survey is based on a sample of 588 owner-managers in companies with a turnover of £1 million +.
For further information, journalists should contact:
Barry Gardner Bank of Scotland
Tel: 0131 243 7194 / 07900 227 292
E-mail: barry_gardner@bankofscotland.co.uk
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For more information from ORB please contact Allan Hyde on 0207 611 5272 or email allanh@opinion.co.uk
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