Last checked at 
By Kate Holton and Sarah Young
HEDDINGTON, England, Feb 14 (Reuters) - For Peggy Robinson,the directives coming from the European Union are now sorelentless she hires an extra person just to "wade" through thepaperwork at her small family firm.
Gareth Jenkins, a small manufacturer from Wales, reliesheavily on his lawyer to understand the many rules, anddescribes the experience as a snowstorm of new legislationcoming from every direction.
Both are typical of many small businesses around Britain whobenefit hugely from free trade but feel they are buckling underthe weight of regulation and are starting to wonder whether lifemight be easier if the UK withdrew to Europe's sidelines.
The debate has taken on added meaning since Prime MinisterDavid Cameron said last month he would seek to cut red tape in arenegotiation of the terms of Britain's EU membership, beforeholding a straight in-out referendum by the end of 2017.
"They're telling us how to run our companies, and thatgrates," says Robinson, who handles the paperwork for herfamily's 25-person manufacturing business from a farm inHeddington, in southern England. "Our cultures and practices aredifferent, yet our hands are bound."
The issues that concern the companies include health andsafety regulations, changes to pensions, and requirements formaternity and paternity leave. Cameron said "Europe had gone toofar" in setting "unnecessary rules and regulations".
Much of the response from business so far has come from theheads of the country's largest companies, such as WPP's Martin Sorrell and Virgin Group's Richard Branson, who believe afive-year wait for a referendum will create uncertainty andstifle investment in the $2.5 trillion economy.
But the opinions of smaller companies, which with staffnumbers of between 20 and 100 lack the manpower to handle "redtape", are more nuanced.
"We all like free trade. We all recognise the euro zone asour main trading partner," said Jenkins, managing director ofFSG Tool & Die in south Wales. "But the things we don't like asa community are the raft upon raft of legislation. It's likebeing in a snowstorm. There are so many flakes you can't countthem."
RED TAPE
The Federation of Small Businesses says EU regulation fallsdisproportionately on small firms.
Vic Haines Transport is a father-and-son haulier based inthe Midlands that started in 1970 and delivers goods aroundBritain, including imported items and goods for export. Theyhave had to adapt since the financial crisis hit in 2008 toavoid the fate of rivals who have fallen by the way side.
"Europe for us is really just a pain in the arse," VicHaines said in his small office on an industrial park,surrounded by photos of lorries, rugby teams and grandchildren.
He complains that Britain observes the rules more closelythan other countries in Europe.
"We are stuffed up with all these rules and regulations, andwe're the only ones doing it. You go to France and they don'tknow what a health and safety executive is."
The trade body that represents the country's manufacturersacknowledges that a large part of the problem in Britain is theway the government interprets the rules.
"Other countries in Europe often find ways to introducelegislation that is less burdensome," said Steve Radley, thedirector of policy for the EEF manufacturing group.
But he also cautions that "Brussels" has become a catch-allword for any regulation that is seen as unnecessary, regardlessof whether it stemmed from the EU or Westminster.
PILES OF PAPER
In Robinson's office, numerous EU directives are stackedamong the piles of paperwork.
"We have EU directives where the draft started out at fivepages long and it was well intentioned," she said whilescrolling through a website that churns out the latest rules.
"But once it's gone through 25 countries, it's at 25 pages.It's been diluted, and it's meaningless. It's paperwork forpaperwork's sake, but we have to keep on top of it."
Cameron wants Britain to stay in a reformed EU, and onbalance the small businesses that spoke to Reuters agree. Asurvey by the British Chambers of Commerce conducted last yearshowed that 47 percent of firms want a looser relationship withthe EU, while only 12 percent want to leave.
"Nobody wants to lightly walk away from a market of 500million consumers," said the London Chamber of Commerce's policydirector Sean McKee. "That would be madness."
The directors who spoke to Reuters said they hoped Cameroncould use the looming referendum to improve the terms of theirEU membership, and they hope it will spark a proper debate in acountry where Brussels is often depicted as a facelessbureaucracy intent on imposing petty regulations.
"If there was no free trade, we would be uncompetitive,"Jenkins of south Wales said. "That's the nightmare scenario.Every business person I talk to would like to be in the EU butthrottle back on some of the legislation."
Others are concerned that even though they are conscious ofthe burden of regulation, they believe it is a price worthpaying and see the referendum as a huge gamble.
Several said the single market had made trading much easierin terms of the paperwork needed to move goods and people aroundthe region, and warned that it was more complicated to export tonon-EU countries.
"It gives us fewer barriers for trading, there's lessbureaucracy when it comes to crossing borders, and there's lessdocuments required," said Dominic Yeardley of the European RoadFreight group in Hull, northern England.
At the other end of the country, Alun Morgan, the Technicaldirector at Arcol Resistors in Cornwall, agrees.
"I don't know how onerous paperwork would be were we to stepback from Europe, but I'm certainly sure they wouldn't make itany easier, would they?"
