In a survey carried out by Old Mill accountants and financial advisers, 78 per cent of businesses in the south-west expected the burden of red tape to increase in 2008, with 19 per cent forecasting it to stay the same.

Corporate partner Jolyon Stonehouse said: “This is a real reflection of the growing impact red tape has on businesses, despite government assurances to reduce the regulatory burden.

“Fewer than four per cent of respondents to our survey expect a decrease in the red tape burden, notwithstanding government promises to cut the cost to businesses of dealing with Whitehall by 25 per cent by 2010.”

Recent figures revealed that £56 billion of new regulatory burdens have been imposed on business since 1998. But business secretary John Hutton claims the government is on target to deliver its 25 per cent reduction by 2010, with the south-west reportedly enjoying a £77 million saving in the first year of the initiative.

He argues the government has taken a number of positive steps, including halving the number of health and safety forms businesses have to fill in, speeding up the approval of planning consents, and removing the requirement for companies to hold an AGM or hire a company secretary.

“Despite these improvements, south-west businesses are still feeling the pinch of red tape,” said Stonehouse. “There is clearly a large divide between the government’s view of deregulation and that of the people on the ground. The government needs to do a lot more to convince the region’s businesses that it really is acting in their best interest.”