|
Click on the cover to read the latest issue of PSB
Affiliate Links
|
New red tape rules. Where have we heard that one before?06 August 2010 It seems to have been the universal aim of recently elected governments to declare war on red tape. At least the last five administrations, from memory, have made it one of their manifesto cornerstones, only to see it sink without trace as other priorities rise to the surface. Well, the new coalition is no exception, with its ‘one-in, one-out’ regulatory system that comes into effect at the beginning of next month.
The new system is part of a package of measures the government hopes will stem the growing burden of red tape on small firms and create a culture of ‘regulation as a last resort’. It will be overseen by a strengthened Regulatory Policy Committee tasked with scrutinising proposed regulations and the implementation of EU legislation in advance of policies being formed. A set of ‘principles of regulation’ has been agreed for departments to follow when they are considering new laws impacting upon businesses and social enterprises.
The Forum of Private Business (FPB) welcomes the move but warns that, for the committee to be truly effective in implementing the new system, it must be able to enforce these principles and influence regulatory practice within government departments. The Forum’s head of campaigns Jane Bennett approves the cut of the coalition’s jib in pushing ahead with its commitment to improving the regulatory landscape, but the concept of introducing regulations only as they are needed is absolutely necessary, she says, given the existing burden on small businesses.
The FPB insists that the independent Regulatory Policy Committee must be a real watchdog influencing departmental practice if it is to bridge the gap between over-regulation, which is what we have now, and lighter-touch intervention.
“That means being able to enforce these principles of regulation, which are as yet undefined,” says Ms Bennett.” As with many of the coalition’s new policies, the follow-through is what will be important.”
Last year, the FPB's ‘Cost of Compliance' survey revealed that 81% of businesses surveyed believe the existing regulatory framework is unrealistic, unfair and far from robust. It found that red tape costs smaller employers a staggering £9.3bn per year in internal costs (mainly time spent on administration), and found they spend an average of 37 hours per month complying with the law.
Particularly time consuming were the tasks of understanding new regulations (73% thought this was excessive) and the general monitoring and administering of legal responsibilities (74%). Monitoring and administration was deemed to be most costly (45% felt the cost was excessive), closely followed by implementing health and safety legislation (selected by 42% of respondents).
According to the research, the amount spent by smaller businesses on employment law – at £2.4bn – is the highest out of all seven different types of legislation categorised. This surpasses the £2.1bn per year spent on health and safety administration and £1.8bn on tax.
Business secretary Vince Cable believes these measures represent a fundamental shift in how Whitehall has traditionally used regulation as a way to command and control. “We have to move quickly delivering credible and meaningful reductions in the burdens that hinder hard-pressed businesses and charities,” he says. “We have to create a common sense approach in the way we think about new laws. By ensuring regulation becomes a last resort, we will create an environment that frees business from the burden of red tape, helping to create the right conditions for recovery and growth in the UK economy.”
Business owners and members of the public can identify the specific regulations they believe should be removed or changed via the Government’s Your Freedom website, which was launched last month.
Les Hunt
Editor
Contact Details and Archive...Related Articles...Most Viewed Articles... |
|