A Department for Business and Trade survey has exposed widespread frustration with the UK regulatory regime, with companies citing inconsistent application, excessive cost, duplication, and uncertainty as barriers to growth.
The survey of 271 respondents found that 96% said regulation was creating unnecessary problems, while 89% raised concerns about unreasonable costs. Companies pointed to pressure points including extended producer responsibility for packaging, environmental permitting, IR35, chemicals regulation, and financial compliance.
The findings add weight to the government’s stated ambition to reduce administrative burdens on business. Ministers have previously targeted a 25% reduction in administrative costs by the end of the parliamentary term, although the survey suggests companies are yet to feel meaningful relief in day-to-day operations.
Extended producer responsibility, or EPR, appears to be one of the clearest flashpoints. The packaging regime is intended to shift more waste-management costs onto producers, but companies have complained about intensive reporting, unclear requirements, and administrative strain. Smaller companies face not only the direct cost, but also the time and specialist capability required to comply.
Other concerns cited by respondents reflect the breadth of the UK compliance burden. Environmental permitting can delay projects and investment. IR35 continues to complicate contractor engagement and workforce planning. Chemicals regulation affects manufacturers, importers, distributors, and product-based businesses. Financial compliance adds reporting, governance, and advisory costs, particularly for companies operating across several regulatory frameworks.
The common thread is complexity. Companies rarely face one regulatory obligation in isolation. A manufacturer may need to manage packaging, chemicals, energy, employment, tax, customs, health and safety, environmental permits, and product standards at the same time. A retailer may be dealing with EPR, employment regulation, consumer law, data protection, cyber security, food or product compliance, and sustainability reporting.
That cumulative burden increasingly feeds into investment decisions. A company deciding whether to expand a site, launch a product line, take on staff, enter a market, or modernise systems has to price in approval timelines, compliance work, reporting duties, and the risk that guidance changes after investment has already been committed.
The strain is sharper for smaller companies. Large enterprises can spread compliance costs across legal, finance, risk, sustainability, HR, and operations teams. Smaller businesses often rely on founders, owner-managers, external advisers, or stretched internal finance staff to interpret the same rules.
The Federation of Small Businesses has previously estimated that SMEs spend tens of billions of pounds a year complying with regulation. That figure has become a recurring part of the policy debate because it captures more than fees or direct payments. It includes management time, external advice, software, data collection, form-filling, inspections, delays, missed opportunities, and uncertainty.
Regulation is not inherently anti-growth. Clear rules can support investment by reducing uncertainty, protecting consumers, raising standards, and creating common expectations across markets. The problem identified in the survey is not the existence of regulation, but the way rules are designed, applied, communicated, and updated.
The most damaging forms of regulation are often unclear, duplicated, or unevenly enforced. When companies cannot predict how long a decision will take, whether different regulators will interpret rules consistently, or how much evidence is enough, compliance becomes a drain on management attention and capital allocation.
The issue also sits alongside other cost pressures. Companies have been managing higher wage bills, employer National Insurance changes, business rates, energy costs, insurance premiums, cyber spending, and technology investment. Regulation compounds those pressures when it creates fixed costs that do not scale with company size or risk.
Ministers now face a delivery test rather than a messaging test. Broad deregulation promises can quickly become politically difficult because individual rules usually have a public purpose. Cutting administrative burden requires detailed work: simpler forms, better guidance, interoperable digital systems, predictable decision timetables, proportionate thresholds, and stronger coordination between regulators.
The risk is that “red tape” becomes a slogan rather than an operational reform programme. The companies responding to the survey are not only asking for fewer rules. They are asking for a regulatory system that is easier to navigate, more consistent, and better aligned with the realities of running and scaling a business.
As policy pressure increases around productivity and investment, the regulatory environment will sit closer to the centre of the growth debate. Companies that can absorb complexity will continue to do so, but the cost will show up in slower decisions, deferred investment, and management time diverted from customers, products, and productivity.
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