Regulation costs business £80 billion a year
The Institute of Directors (IoD) has renewed its call to all political parties to take the issue of over-regulation of business seriously. If we want UK companies to remain competitive, it says, government needs to step out of the way, and give businesses the freedom to operate. Achieving this requires a culture change in government.
Using a new approach to measure the cost of regulation, based on the experiences of real people running real businesses, the IoD believes that the cost to business of government regulation is now running at more than £80 billion a year. This equates to 5.7% of the UK’s GDP. Instead of building up their businesses and creating new jobs, the IoD has found that directors are spending over a month each year handling government red tape.
While the government claims that the estimated burden of regulation is £13 billion a year, the IoD takes a different approach to costing, which factors in all the hours spent form filling, reading guidance, taking advice and performing other administrative duties associated with regulation. And the IoD’s £80 billion figure doesn’t even include the cost to companies of having to adapt their behaviour to comply with regulation.
Commenting, Miles Templeman, IoD Director General, said: “£80bn is effectively being taken out of the UK economy each year due to regulatory paperwork.”