According to an independent annual report called Business Perceptions of Regulation published by the National Audit Office and BIS, the burden of regulation on employers is beginning to lift, with fewer firms citing regulation as an obstacle this year compared with recent years.

The report, the fifth to be produced, found that 41 per cent of businesses say that the balance of regulation is about right, although 55 per cent of employers felt that the level of red tape is an obstacle to their business.  However, this figure is down from a peak of 62 per cent in 2009. SMEs were more likely to report an increasing burden than were large businesses.

Business and Enterprise Minister Mark Prisk said: “Reducing the burden of regulation for business is at the heart of the Coalition Government’s ambition to make the UK one of best places to start and grow a business. This report suggests that businesses can now see progress, but there is clearly more to do. We are committed to this process.”

Commenting on the report, Steve Radley, Policy Director at EEF, the manufacturers’ organisation, said: “We welcome the government’s efforts to tackle red tape and note the progress suggested by the report. But, the view from industry is that progress is too slow.

“With its own report showing that more than half of companies still cite regulation as an obstacle to growing their business, the government can and must do better. In particular, it must grasp opportunity with its forthcoming employment law reforms to take measurable actions that will make a real difference to business.”

Other findings from the report were that 46 per cent of businesses believe that the burden of regulation will stay the same over the next 12 months and a third of businesses felt that complying with regulation had become more time consuming over the last 12 months.