The following is an extract from the monthly Barometer press release issued by the University on Wednesday 16th February 2005.

Businesses avoid regulation by stifling growth

Nearly a quarter of businesses questioned by an internet survey revealed they had purposely avoided growing their businesses to avoid the impact of regulation.

The impact of regulation on economic growth is an area that causes concern to both the Government and businesses themselves. Of the 24 per cent who told the UK Business Barometer, run by The University of Nottingham's Institute of Enterprise and Innovation, that they had decided against growth, nearly all attributed this to the impact of employment legislation.

The UKBB sister survey, the UK Business Adviser Barometer, revealed that 76 per cent of the advisers questioned had worked with businesses that had decided not to grow because they did not want to pass regulatory thresholds. They cited employment legislation and VAT as the main reasons leading to businesses not increasing their size.

Employment regulations 'place a disproportionate burden on small firms.'

A further question on regulation in the January surveys asked panellists from what single regulation small businesses would choose to be exempt. Almost two-thirds wished to avoid employment regulations, often claiming that they place a disproportionate burden on small firms. Several highlighted the difficulties in dispensing with the services of employees (8 per cent), others cited health and safety (8 per cent), while maternity/paternity leave regulations were a concern for 13 per cent..

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