Government urged to create commercial regulatory environment that will steer the economy away from recession

A leading business group and academics are urging the Government to learn lessons from the implementation of Covid-19 health measures in order to create a commercial regulatory environment that will steer the economy away from recession.

More than a third, 35 per cent, of small businesses found it quite or very difficult to understand the regulations relating to Covid-security, according to a joint study from the Federation of Small Businesses (FSB), Newcastle University and the University of Birmingham.

The ‘Navigating the Covid-19 Regulatory Landscape’ report was funded by the Economic and Social Research Council (ESRC) as part of UK Research and Innovation’s rapid response to Covid-19.

One in five, 22 per cent, of the close to 1,000 small businesses surveyed for the report say the line between advisory guidance and regulatory requirements during the pandemic was “totally unclear”.

Small businesses found it quite or very difficult to understand the regulations relating to Covid-security.

That lack of clarity led to a tendency to “gold plate” by some small firms – going beyond minimum requirements for fear of falling short, coming at a cost in terms of worry, time and money.

Martin McTague, national chairman of the FSB, said: “With economies now thankfully unlocked, this is the moment to step back and assess what broad regulatory lessons can be learned from the pandemic.

“While it is understandable that governments and regulators had to act at great speed as the circumstances of the pandemic evolved, some of the regulatory shortcomings were consistent with problems encountered in more normal times, including around clarity and communication.

“The gold plating trend that we saw over the lockdowns is not confined to health measures, this is a wider issue that drains firms of the resources they need to innovate, upskill and recruit as we work to secure our economic recovery.

“Constructive, clear regulation is a boon for small firms – ensuring they can excel in safe, productive environments. Complex red tape, by contrast, is a constant drag.”