Crippled by regulation: No wonder small business owners wish they were employees

Janice Atkinson for The Daily Mail
24th January 2012

Apparently, one in four business owners are wishing they could return to being employees again. Is it any wonder when the full force of EU and government red tape and legislation pins them to their desks rather than creating new business, which is what drove them to be bosses in the first place?

If, like friends of mine, you run a small chain of nurseries, why is there still in place the requirement of a curriculum for two-year-olds? David Willetts told me that this would be abolished.

If you run a small bakery in Barnsley and employ a number of women, at any one time you could have at least one on maternity leave. That employee is entitled to 52 weeks’ maternity leave with more on the way from the generous EU. Does the employer then take on a temporary worker to replace her for the duration of the maternity leave?

The employer would be reluctant as the EU has decreed that under the Agency Workers’ Directive, the temp, after 12 weeks’ employment, is then entitled to full employment rights. David Cameron postured on this but failed to block the directive because Vince Cable supported the EU and Cameron’s MEPs voted through the legislation.

Then there is extended parental leave currently being considered by the coalition government. On the face of it, yes, both parents should share responsibility for their children. However, according to the Department for Business, Enterprise and Skills the cost for extending parental leave to up to age of 5 will cost employers up to £44.6million per annum plus a one off cost of up to £14.4 million and the exchequer up to £209.7 million with a one off cost of £86.3 million. But they’re not stopping there, they are producing models for extending leave up to the age of 18 years. It is business who will have to pay.

The Federation of Small Business cites regulation as one of the main barriers to growth: The UK still ranks 89th out of 139 countries for having the largest regulatory burden on business in the World Economic Forum’s Global competitiveness report. Countries regarded as having similar workers rights and safety levels have managed a much better ranking, such as New Zealand which is ranked 25th for the regulatory burden that it imposes and Finland which is ranked 10th. This is not an argument about protection; this is about efficiency.

The government promised to stem the flow of regulation and cut back others.  So far it has not cut back any regulation. It talks tough and Health and Safety but nothing has been done.

Vince Cable and Cameron and Co should stop worrying about the ‘excesses’ of top bosses pay, the ‘unfairness’ of the bonus culture and concentrate more on small businesses, the backbone of the British economy and the largest employer. You can see why bosses of small business do yearn to return to the shop floor.

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