Research finds small brokers hit hardest by 'disproportionate' regulatory burden
Biba and the Federation of Small Businesses (FSB) have warned the government that it must do more to combat the disproportionate cost of regulation on small insurance brokers.
Research released at last week's Biba conference showed that the smaller the company, the greater the proportion of its annual income spent on meeting the demands of regulation.
The research found that an average of 3.7% of a company's annual income is spent on meeting regulation. For companies with less than £100,000 in income, however, that figure rises to 5.20%, compared to 1.13% for companies with an annual income of more than £100m.
Biba chief executive Eric Galbraith called on Tony Blair to urgently review the disproportionate cost.
In a letter to the Prime Minister, Galbraith wrote: "I am sure that when you said that you would 'not let business be bogged down in bogus bureaucracy' in 1998, this was not what you would have envisaged happening eight years on."
Galbraith argued that brokers played an important part in protecting and developing the economy and it was fundamentally wrong they should be so "disproportionately and detrimentally" hit by regulation.
He said: "Excessive regulation can be damaging for all businesses, but it is not good enough that the smallest companies are having to spend five times more than the largest simply to keep up with regulatory demands."
Stephen Alambritis, head of Parliamentary affairs for the FSB said: "It is clear that the disproportionate cost of regulation, outlined in this research, needs to be addressed by the government.
"Our country's economic health depends on the success of small businesses. "Regulation, both its volume and complexity, is a major issue for all small businesses. I urge the Government to review the cost of regulation on insurance brokers as a matter of urgency."