The Bribery Act must be reformed to help mid-sized businesses to bolster Britain’s international trading performance, according to a new report.
Mid-sized businesses account for £1 in every £4 of goods exported, despite making up less than 1% of all UK businesses, according to the BDO study which produced the report.
The Bribery Act came into force in July 2011 as a measure to curb bribery in commercial business by making organisations accountable for associated persons committing bribery on their behalf. However, the BDO has said that exporters are “hamstrung” by the complexity and paperwork involved in complying with the act. It argues that this has resulted in an international perception that it is difficult to do business with UK firms.
To tackle this, the BDO study argues that removing some of the red tape would encourage firms to sell more overseas, which it said is essential to making progress towards the government’s target of doubling exports to £1trillion by 2020.
“There is a clear administrative burden created, which is best illustrated by the fact that nearly half the length of some applications forms (for government exporting assistance) arises from the Bribery Act,” the BDO said.
“Clearly, bribery and corruption is morally wrong and distorts markets, but the government should review the unintended consequences of the Bribery Act and develop a fresh set of guidelines and recommendations for businesses clarifying the purpose, intent and scope of the act.”
Meanwhile, the act has previously received criticism from the CBI and Institute of Directors for allegedly damaging Britain’s exporting prospects.
The BDO has said that mid-sized businesses are an “exporting powerhouse” that could help rebalance the economy.
Simon Michaels, a BDO partner, said: “The UK’s mid-sized businesses are … capable of so much more. More can be done to help, especially around the challenge of exporting abroad. The government is focusing on rebalancing the UK economy and driving regional growth. The mid-market, with its strong presence across the entire UK, must be a vital part of its plans.”