Business pays £15bn red tape bill

THE TIDE of red tape introduced by Labour has cost business more than £15bn. Firms have spent more than £3bn a year implementing the thousands of regulations brought in since Tony Blair won power in 1997, the British Chambers of Commerce said on Monday.

'Businesses are being held back by the welter of different regulations,' said a BCC spokesman. 'If the Government want the UK to be truly competitive they have to help businesses to do their best.'

The organisation is launching a campaign this week to highlight the impact on individual firms of some of the thousands of regulations introduced by Whitehall. Coming a month before the Budget, it is intended to step up pressure on Chancellor Gordon Brown to cut regulations.

The Chancellor has been blamed by some business leaders for his pet obsession with tax credits, such as the Working Families Tax Credit, which are distributed through pay packets to the less well off. These shift the administrative burden for the credits onto employers.

The Federation of Small Business said that the costs inflicted on companies by the tax credits had risen dramatically. A 'burdens barometer' compiled by the BCC found, however, that the three most costly regulations for business were European Union directives adopted by Labour.

The most expensive was the working time directive, which has cost firms £7.65bn since its adoption in 1998. The data protection directive is estimated to have cost £3.1bn over the same period and the pollution directive £1.6bn. Last year, the Government introduced 4,642 regulations despite pledging to sweep away red tape.

Shadow Chancellor Michael Howard claimed the burden of extra bureaucracy has increased by nearly 50% since 1997. 'It is ironic that at the very time when Tony Blair is lecturing our European partners on the need to reduce red tape, the BCC reports that the cost to British business of the red tape introduced since 1997 is more than £3bn per year,' he said.

'It is about time the Government started acting in accordance with their words rather than just preaching to others,' he added. 'They should be reducing the burden of red tape on British business, instead of piling it on.'

The BCC will also announce the setting up of a think-tank of experts and business leaders to try to find a way through the red tape.