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Red Tape Britain

Happy Small Business Saturday! Today politicians are encouraging us to make a conscious choice of shopping locally rather than just automatically using supermarkets.

This morning the Sajid Javid, the Culture Secretary, is speaking in Birmingham addressing the concerns about late payment of bills.

Mr Javid will say:

“Recent figures showed that last year alone there was £40billion still owed to small businesses. This is an absolute scandal.

“We lived above the shop – my parents and their five sons. And that upbringing seared something onto our souls: a belief in enterprise, opportunity, reward for hard work.

“So I know what it’s like for small businesses. Your fortunes, your happiness – they fluctuate with the day’s takings.

“We are fed up with the way so many hard working, reliable people are being treated.

“Today I can promise that we will take action. We will legislate to take action against unfair contractual practices I am confident our measures will help thousands of businesses get the billions of pounds they’re owed. And it’s right we do so. Because you’re the backbone of our economy, and you shouldn’t have your backs broken by clients who don’t keep their side of a deal.”

On Wednesday George Osborne, the Chancellor of the Exchequer, announced a review of Business Rates in the Autumn Statement. Any changes will be “fiscally neutral” – but that might still allow some relief for small firms. The Government can already point to having made some progress in this area. I also think more pressure should be applied to local authorities to use the flexibility they have.

The greatest difficulty is the remorseless increase in regulation. Much of this is imposed by the European Union. But there is also automatic pressure for politicians to bring in ever more rules for electoral motives. There will always be pressure groups using the media to make the moral case. Tedious points about unintended consequences get drowned out.

One way of politicians to show how “caring” they are is to spend money. Naturally the potential for extra splurges in that direction are rather constrained at present. However another opportunity for politicians to show themselves in a compassionate light is to pass more legislation obliging private individuals and businesses to behave better.

It is easy to see how the demands come about. For example there is a report this morning that 20 per cent of shops have now ramps for wheelchairs. Two thirds of retail staff have no training in how to help disabled customers. 40 per cent restaurants do not have an accessible lavatory. Only 15 per cent of retailers have hearing loops for shoppers with hearing impairments.

The Minister for the Disabled, Mark Harper, says these businesses are “missing a trick” as they are losing out on income from potential disabled customers. He is seeking to persuade them to do more. Fair enough. But if persuasion fails will more regulation follow? If so would more small corner shops close? If so that would not help many elderly and disabled people for whom a longer journey to the shops would be a struggle.

Or then we had Nigel Farage getting into trouble over suggesting that women breast feeding might be asked to do so “in the corner” in cafes. There is lots of strong indignation. How long before regulations obliging shops and restaurants are brought in to stipulate  that breast feeding must be allowed? Or indeed there is a counter demand for a Farage Law – that special corners be made available for breast feeding in private?

Then, of course, there is the agenda of improved employment rights. So often the cost being met by those who end up not having a job at all as small businesses are put off from recruiting.

“Cutting red tape,” is an easy slogan for Ministers seeking popularity. Regulations hit small firms much harder than large firms with their teams of compliance officers. Achieving a reduction in bureaucracy would boost economic growth and thus offer some prospect of electoral reward. But embarking on the journey requires bravery. All the immediate rewards are for passing more worthy sounding laws not repealing them.

 

 

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