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Red Tape is stifling SMEs

Red Tape is stifling SMEs
- A summary of a national poll carried out to UK SMEs

This week the Prime Minister blasted the civil service for loading costs and red tape regulations onto businesses. Touch Local carried out a poll amongst a sample of UK SMEs registered on our directory to find out if small business owners believed that red tape regulations are holding back growth for SMEs.

The Survey

As a small business owner, do you believe red tape regulations are holding back growth for SME's?
The Results
Yes: 646 (80%)
No: 99 (12%)
Dont Know: 68 (8%)

*Total responses: 811

The businesses who took the survey are all listed on


More than three quarters of small business respondents (80%) agree with the Prime Ministers belief that businesses suffering from red tape regulations frankly cannot take it any more. The majority of these believe that the administrative cost and time spent on red tape is stifling the growth of their business, and fear that under the new Government things will not improve. Only 12% of small business owners do not believe that red tape is affecting the growth of SMEs. Of these, many note other legislations that are having a detrimental effect on small businesses, whilst others indicate that some industries such as banking rely heavily on red tape. 8% of respondents did not know whether red tape is affecting small businesses.

Some of the comments from the respondents:

Certain business sectors such as banking need much more red tape - without sufficient regulation, business will be forced to develop unsustainably and eventually crash.

You deal with more red tape than doing business.

The banks are holding us back by not spending, not the red tape.

I'm too scared to employ anyone - particularly women who may get pregnant. As a woman myself I am horrified by my response, but paying maternity leave could bankrupt my company. And employment law is such that it is practically impossible to get rid of someone who isn't good enough.

That too could destroy my company and I'm not prepared to risk something that has taken me years to build.

Whilst I am unaffected by red tape, I do know of many SME's who are affected.

It's not been a problem for me personally so far, but I know it is for many small businesses.
I have stayed self-employed not taken anyone on as there is too much red tape.

All the red tape and lack of assistance is stifling small businesses and growth in this country.

SME's rarely have the manpower to trawl through legislation.

I am a small business owner and I sub-contract all my work. If there was less red tape I would consider employing people directly.


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