Small businesses face red tape ruin

26 October 2000 by
Small businesses face red tape ruin

Excessive red tape is continuing to put small hotels and restaurants at a disadvantage to their larger rivals.

That was the conclusion the Government's Better Regulation Task Force reached last week in its third annual report.

It warned that overwhelming small firms with red tape made them more likely to ignore some regulations such as the working time and parental leave directives.

One estimate suggested that 86 Acts of Parliament impacted on a small restaurant.

The report followed a survey by the Chartered Institute of Accountants, which found that the cost of compliance with laws ate into 4-6% of small companies' turnover.

For those with up to 10 staff, the bill had more than doubled from £1,700 last year to £3,600.

Businesses with 11-50 staff have seen costs soar from £4,700 to more than £8,000.

Ian McKerracher, chief executive of the Restaurant Association, said: "We are the most over-regulated we have ever been and it could become substantially worse. It will not be long before restaurants don't have time to cook for their customers."

McKerracher singled out the European directives dealing with GM labelling, working time, part-time workers and parental leave as particularly punishing.

by Angela Frewin

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