UK Businesses Cheer Government Blitz on Red Tape
The new U.K. Business Minister, Michael Fallon, has promised a “drive to cut red tape” to boost business growth to help the country out of recession. For one ice cream man this can’t come soon enough.
George Manoli is the manager of Mr. Whippy ice creams, a nationwide fleet of vans that visit carnivals, concerts, weddings, fairs, schools and housing estates, selling their special blend of ice cream along with a range of hot and cold snacks.
Manoli’s own regular route is around the town of Stockport, on the outskirts of Manchester. Due to various rules and regulationshe says his job has become increasingly difficult.
“They are cutting the air that you breathe,” he told CNBC.com.
High rainfall this year and the resulting soft ground has meant that more events than ever before have been canceled for the company in the interests of health and safety.
When touring urban neighborhoods, mobile ice cream sellers traditionally used a distinctive melody, played loudly to alert potential customers of their presence. Due to restrictions this jingle can now only be four seconds long, can never be used twice on the same street and can’t be used after 7 p.m. in the evening.
“If they can’t hear me then they don't come out and buy,” Manoli said. One of his colleagues has found a loophole in the law by ringing a large bell instead, mimicking a medieval town crier.
“The head of licensing at the local council is on my round, so I have to be very careful,” he said.
Manoli’s own van cost 72,000 pounds ($116,608), his company is certified by the Chartered Institute of Environmental Health, fully insured for public liability and registered with the local authority. But he highlights that not all adhere to the rules.
“There are eight vans licensed in the local area yet there are 32 vans on the streets, some of them even sell cigarettes, I only sell ice creams and sweets. The council do nothing about it,” he said.
Stockport Council told CNBC that it takes enforcement action where appropriate and is committed to supporting and helping small businesses thrive within the borough.
Manoli also bemoans the fact that other local authorities have put 500 meter exclusion zones around school buildings.
And he is not alone with his discontent. Curtis Gilmore, CEO of audio engineering firm Sound Services, says profit has been hit after traffic congestion charges and carbon emission rules came into force. It means he is spending more on transportation.
“No wonder we are in recession with all these draconian laws and regulations that have to be adhered to by business owners,” he told CNBC.com
“You have to adhere to them otherwise you get fines which can mount up to hundreds of pounds.”
The Department for Business, Innovation and Skills this month announced a push to release small businesses from red tape. Over 3,000 regulations are to be scrapped or overhauled and hundreds of thousands of businesses are to be exempted from health and safety inspections.
Business Secretary Vince Cabletold CNBC how dynamic the small business community in the U.K. has been, despite the lack of growth in the economy.
“We’ve a million and a quarter jobs created and that’s entirely by SMEs in the last couple of years. We have a very enterprise friendly system but clearly we need to do more.”
Phil McCabe is the spokesman for the U.K.’s Forum of Private Business, a lobby group looking after the interests of small businesses. The group's research has found that firms are spending more time and money on complying with regulations - 16.8 billion pounds ($27 billion) per year to be exact.
McCabe believes proportionality is the key to business regulation.
“There are times when legislation is necessary but, more broadly, there simply has to be a bolder deregulatory agenda to free firms to grow and create jobs,” he told CNBC.com.
“The Government is making many of the right noises but, as yet, there is little difference on the ground.”
Entrepreneur and investor James Caan told CNBC that SMEs are the lifeblood of the economy and the U.K. government can play its part in paving the way for a strong recovery over the next twelve months.
"Businesses need to focus all their energy on doing what they do best and creating jobs and growth. Too much red tape is stifling recovery," he said.
James Caan presents CNBC's new series The Business Class, which charts the route to success for small businesses. It starts October 17 at 10 p.m. London time.
Watch the promo video here.