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IoD: 4 in 10 business leaders believe regulation has a negative impact on their organisation!

14 Oct 2021

The Institute of Directors has today published data showing that the negative impact of regulation is only exceeded by that of the Coronavirus pandemic and employment taxes, and has called for the Government to do a better job in shaping a more business-friendly regulatory framework. 

In a recent IoD survey of over 600 directors, 40% stated that compliance with Government regulation was having a negative impact on their organisation, compared to 53% for the Coronavirus outbreak, 41% for employment taxes, 40% for UK economic conditions and 39% for skills shortages/employee skills gaps. 

In the IoD’s response to the BEIS consultation, ‘Reforming the Framework for Better Regulation’, Dr Roger Barker, Director of Policy, said: 

“In order for business to play a meaningful role in building back better, it is essential for the Government to do a better job in shaping a more business-friendly regulatory framework. New business regulation must be more critically scrutinised in order to ensure that it is effective, proportionate and free from unintended consequences. 

“The process would be more robust if it incorporated a more central role for an independent scrutiny body, like the Regulatory Policy Committee (RPC), at an earlier stage of the policy making process. Similarly, we would like to see the government’s own impact assessments of proposed regulatory changes always published at the consultation stage so that they can be taken into account before the legislation is introduced into Parliament. 

“As well as assessing individual regulatory proposals, a broader view of the cumulative impact of regulation is also required. This broader perspective should be developed in the context of an overarching objective to reduce unnecessary regulatory burdens on business. The previously employed offsetting approach of ‘One In, Two Out’ has not been particularly effective in controlling the aggregate regulatory burden on business. It is not the number of regulations that matters to business, but rather their effectiveness and impact on business activity.” 

The IoD full response to the consultation can be found here.  

Full survey results  

635 respondents, conducted between 13th-27th September 2021. 

Which of the following factors, if any, are having a negative impact on your organisation? 

New trading relationship with the EU


Compliance with Government regulation


Business taxes


Employment taxes


Broadband cost/speed/reliability


Cost of energy


Global economic conditions


Difficulty or delays obtaining payment from customers


Skills shortages/employee skills gaps


UK economic conditions


Coronavirus outbreak


Transport cost/speed/reliability


Other (please specify)


None of the above


Don't know/Not applicable


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Hugo Legh, Media and Communications Lead

0208 078 4138

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