Research carried out by small business lobby and support group the Forum of Private Business (FPB) has found firms in the region spend around £1,053 million a year complying with government legislation.

Entrepreneurs in the North West face the third largest bill in the country for dealing with paperwork, with only firms in London and the South-East spending more.

The figure for the North West, based on the amount of company time spent complying with laws and regulations, includes £234 million on complying with health and safety legislation, £272 million spent dealing with paperwork on employment law and £30 million on dismissals and redundancy.

Work associated with staff absences cost £44 million, while dealing with maternity matters came in at £26 million and disciplinary issues at £37 million.

Paul Hodgson, who manages SVC Ltd, a door manufacturing firm in Walton-le-Dale which employs 12 people, agreed red tape has an impact on small companies.

He said: "When I started, it was colossal for small businesses like ourselves trying to navigate round it all and comply.

"Some of the questionnaires we get from contractors can be an inch thick.

"With the amount of time we spend dealing with these issues, you can take your eye off what you should be doing, which is growing the business."

The FPB is now urging the Government to cut down on the burden of regulation for small businesses.

FPB policy representative Matt Goodman said: "Our research shows that complying with red tape remains one of the major cost burdens facing smaller businesses, swallowing up valuable time and money that could be used more profitably elsewhere.

"As part of a new department with a broader remit, the Better Regulation Executive must continue to put the smallest businesses at the forefront of its plans to change the culture of bureaucracy in the UK."

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