When I’m not cycling and running, one of my roles is as chair of Regulatory Policy for the Federation of Small Business (FSB). When talking to small business owners about the challenges facing them and creating barriers to the growth of their business, one item is always top of the list, the regulatory burden.
Barrier to success
Most small businesses cite at least one aspect of the current regulatory environment to be a barrier to their success. Repeated FSB surveys afirm this, two thirds of the small business community perceive the current domestic regulatory environment to be more of a burden than a benefit to their business.
While there are many positives to the UK business environment, the cumulative burden of regulation continues to pose a recurring challenge despite successive governments attempts at resolution. And the challenge isn’t limited to the UK, most OECD countries have similarly tried and failed to reduce the overall regulatory burden that creates a barrier to growth and productivity in the SME community.
But there’s one distinct exception in the Canadian province of British Columbia. A target-driven regulatory reform regime was proposed and implemented in 2001 following years of economic underperformance due to regulatory market barriers.
The outcome has been a sustained, long-term improvement in the regulatory environment in the province. A forty per cent reduction in regulatory requirements was achieved between 2001 and 2018. It has become self-sustaining with no decline in health, social and environmental outcomes.
The route to success
The British Columbia Model has several characteristics which have been central to its success. These include strong political leadership, simple, clear yet robust metrics on which to base the implementation of the policy, transparency about and rigorous accountability for performance.
We believe that by adopting these key elements, the UK Government will achieve a similar improvement in the regulatory environment here, allowing small businesses to grow, thrive and be an even more productive powerhouse to the UK economy.