SOUTH west businesses believe the regulatory burden is getting heavier and is stifling enterprise, according to research from the Institute of Chartered Accountants in England & Wales.

The ICAEW Enterprise Survey, now in its 11th year, suggests the total annual cost to UK business of implementing new legislation is £10.2bn.

In the south west this equates to an average cost per business of £106,000 - or £61 for each employee.

Nearly half (46 per cent) the businesses in the region believe the imbalance between the needs of regulation and the growth of enterprise has deteriorated in the past year. Health and safety regulation is regarded as the biggest administrative burden, ahead of business taxation.

South west businesses are also the most likely to call on the government to reduce public spending (55 per cent against 45 per cent nationally), and least likely to call for a simplification of the tax system.

As the single top priority, the south west is the region most likely to call for improvement in the transport infrastructure and least likely to seek lower interest rates.

Despite the disproportionate burden of regulation they bear, micro and small businesses remain the key drivers to growth. Nationally, one in five has set a target of more than 30 per cent growth for the next two years.

Across all UK companies 90 per cent say their business objective is to grow turnover, with 40 per cent predicting more than 10 per cent growth. Increasing profitability remains the key financial objective.

Jon Blake, ICAEW south west regional director, said: South west businesses continue to be confident in their ability to grow despite the strain of regulation.

They look to Government to encourage a better environment for enterprise and it is crucial that reducing this enormous burden remains a top priority. 2007 has seen a significant increase in the attention given to the regulatory burden at European level and this is encouraging."

The survey also reveals that south west businesses are lagging behind the rest of the country in embracing globalisation.

Nationally only 10 per cent of businesses believe globalisation will have a negative impact compared to 17 per cent in 2006. In the south west this figure stands at 22 per cent - the highest in the UK.