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' The Excess Of Regulations And The Negative Effect On Smes Has The Potential ...

The excess of regulations and the negative effect on SMEs has the potential to stifle the sector and limit the growth with serious consequences. Considering the financial contribution they make to the UK economy and the number of employees involved, any cut back in their growth or reduction in income would result in increasing unemployment and rising cost for consumers if they were forced to close their companies due to them becoming increasingly uneconomical. Particularly worrying is the fact that self employed people are exempt from the directive entrepreneurs who currently have a small business, could consider working alone to avoid the red tape and administration overhead, particularly costs.

The burden to SME's has also been recognized by the government ref http://www.cabinetoffice.gov.uk/regulation/faqs/index.asp#2 where they produced a document titled ‘Does regulation discourage small businesses?' This goes on to state ‘Government recognizes that red tape can have a disproportionate impact on smaller businesses and is looking at ways to reduce the amount of bureaucracy they have to deal with through the better regulation agenda.'

The Federation of Small Businesses (FSB) reported in February 2007 that ‘The average small business owner in Northern Ireland spends 28 hours per month filling in forms for government'
SME's - examples

In practical terms the SME's have stated their case against the Working Time Directive and identify the need to retain the opt-out option in order to survive. The following example appeared in The Guardian, ref http://technology.guardian.co.uk, Counting the hours when the truck drivers were to be included into the Working Time Directive regulations, March 25, 2004. The directive does not apply to self employed who, at this time, were still exempt. Gary Hoarth, MD of the transport company Sameday stated ‘if his company wants to offer a service for 50 hours in a week, then legally it will need to employ a second person - whereas a self-employed driver could make up the time themselves. If you look at the sort of person we employ, which are semi-skilled individuals, they would tend to increase their earning capabilities through the provision of overtime or additional shifts. If their working time is restricted they need to look at increasing their hourly rate to get them back to where they are currently in terms of take-home pay.'
He forsees a potential problem for employees who wish to maintain or raise their standard of living and require a level of income in order to do this. He believes that skilled employees will go out of the door after their official working week and supplement their incomes with additional, paid part time work outside their regular job.

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