Drowning in red tape: UK regulations stifle ecommerce

Speaking at the Global Knowledge Conference in London, Chris Humphries, director general of the BCC, said the government will stunt rather than enable ecommerce, unless it stops the rush to regulate.

"'Regulation first' is the government's mantra. If this is applied to ebusiness then it will face a difficult time," said a BCC spokesman.

Humphries went on to criticise the tax burden on companies, claiming UK firms have a higher proportion of business tax than their main competitors - Germany, the Netherlands and the US. He called on the government to commit itself to a workable ebusiness strategy.

Jonathan Steel, managing director of the Bathwick Group, said: "This government is particularly red tape fond and is much to blame for stifling ecommerce. For a small business or new dot-com to know which consumer law they have to comply with in 17 different areas, and to be able to defend themselves under that law if need be, is ridiculous."

Contradictory legislation coming from different government departments serves to confuse the business community and put off oversees investment in the UK, Steel claimed.

Mike Pullen, partner at law firm DLA, claimed legislation from the European Commission added to the weight of UK regulations companies must comply with.

"It's always a case of one step forward and two steps back. There is one part of government looking to liberalise ecommerce and another placing more restrictions under the guise of creating a level playing field, and it all comes from European law."

The sheer volume of legislation means that about 80 per cent of companies are not compliant with current EU and UK ecommerce legislation, he said.

Bathwick's Steel agreed: "European legislation serves to be impulsive and reactionary, and certainly a sign of that is what they have done with tax and rules about ecommerce. A lot of legislation comes out of the EU but the majority of it is ignored - you cannot do that with ecommerce."

One of the biggest bones of contention during Labour's term in office is its refusal to listen to calls for tax incentives for start-up companies.