New research from the ICAEW’s UK Enterprise Report, reveals more companies feel that the UK is less business friendly than a year ago, with medium-sized businesses struggling most with the regulatory burden.
The report, which is now in its 15th year, also shows how firms that export are performing better than businesses serving the UK’s domestic market.
Of the businesses surveyed for the 2011 report, only 44% believe the UK is a ‘business friendly’ place to do business, down from 50% in 2010. The most negative opinion is seen in medium sized businesses, where only 38% view the UK as business friendly, compared to 55% in 2010.
Increase in legislation leads to drop in business friendliness
It’s probably no coincidence, that the fall in sentiment comes at the end of a year where businesses have endured a raft of new legislation including;
- Removal of default retirement age
- Right to request flexible working
- Additional paternity leave and pay
- Employers national insurance changes
- Immigration cap
- National minimum wage increase
- Agency workers directive
As has been witnessed in previous surveys, small and medium-sized businesses find the regulatory and tax environment in the UK more onerous than larger companies.
UK business environment viewed negatively globally
In the ICAEW Global Enterprise Survey, Chartered Accountants were asked to assess the business friendliness of the regulatory and tax environment in the countries where they were based. 53% of UK-based accountants viewed the environment negatively, compared to 45% in the rest of Europe.
These numbers are in stark contrast, to the Gulf and the Asia Pacific region where only 9% and 23% respectively viewed the business environment as unhelpful.
Exporting key to growth in current climate
Businesses who export are more likely to have seen an increase in turnover and profit over the last 12 months, according to the UK Enterprise Report.
63% of exporters have grown their business in the last year compared to only 50% of those who do not sell overseas, and this trend is expected to continue through the coming year.
Speaking on the launch of the report, Michael Izza, Chief Executive of ICAEW, said: “The much lauded ‘one in one out’ for regulation is not working, with businesses seeing the legislative burden actually increasing. The chancellor will need to demonstrate renewed commitment to the Growth Plan on 29 November – such as suspending new business regulation for a year.”