Administrative burden of regulation
I was reading a fascinating publication by the Institute of Directors on counting the real cost of Government regulation. The IoD states that, in their opinion, regulation is 'a critical barrier to growth in the UK'.
I have every sympathy with the IoD’s view, particularly in my own specialist area, that of taxation. The legislation is lengthy and complex and businesses spend a lot of time, in house and sub-contracted to firms of accountants, making sure that all required regulations are met.
However, regulation goes much further than pure tax.
The previous Government produced an estimate of the burden of regulation which it estimated at some £13 billion p.a. I have to say I thought this was a fairly high number, but looking at the IoD numbers it is also a significant shortfall. In the IoD’s opinion the total annual administrative cost of regulation is closer to £80 billion.
Even if the IoD are 50% inaccurate the total cost of regulation is still more than double that estimated by the previous Government. I think you will agree that the fact that some people spend almost 45% of their week working on regulatory issues rather than actually earning money and stimulating the economy, is not a figure we should be encouraging.
I hope the new Conservative-led coalition Government does something to stem the ever increasing flow of additional regulatory burden.
Date: 18th May, 2010
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