The Conservatives have pledged to protect small businesses from red tape amid new fears of the rising costs.
Shadow trade and industry secretary Tim Yeo slammed Chancellor Gordon Brown for letting red tape stifle business after figures released yesterday showed a leap in firms, including pubs, going to the wall.
They revealed 176,000 companies failed in 2002, up 25,000 on the number when Labour took power in 1997.
Mr Yeo said: "This gives the lie to claims by ministers they are fostering a climate for entrepreneurs.
"Higher taxes and more red tape stifle enterprise."
Responding to the concerns of small businesses, Mr Yeo said the Tories would consider exempting businesses with fewer than 20 staff from some regulations to reduce red tape and encourage job creation.
He stressed that business and trade bodies need to make their case as the opposition party plans its manifesto for the next general election.
The news follows the latest survey of licensees conducted by the Red Tape Group and The Publican.
It found that licensing is seen as the biggest bureaucratic headache the trade faces.
Stuart Neame, vice-chairman of Kent brewer and pub operator Shepherd Neame, is predicting that the move to local authority control will cost pubs on average £5,000 a year, more than £1bn across the industry as a whole.
Mr Neame said pubs should expect hostile neighbours to demand costly licence reviews, requiring licensees to get legal representation, over the most trivial of issues. Due to the need for local politicians to keep voters happy, he argued, "at least half will lead to some restrictions on the licence, and closure remains a possibility".
Publican's concerns
As reported last week The Red Tape Campaign, working with thePublican.com, asked licensees for their views on the impact of red tape on their business.
Based on the views of more that 420 licensees, the issues where the trade fear increased bureaucracy and regulation most are:
- Licensing
- Smoking
- National Minimum Wage
- 48-hour week
- Noise
- Disability Discrimination Act
- Head on pint
- Parental leave
- Stamp duty
- Pensions
Related articles:
Cost of reform is top fear for licensees (16 October 2003)