Like many others, I have to acknowledge I was initially sceptical about the ‘Red Tape Challenge’ and the merits of EEF getting involved. Was this a genuine exercise in which the issues that really matter to manufacturers were on the table? Or, was it little more than a PR initiative designed to dress up cleansing the statute books of redundant regulations as meaningful deregulation? After careful thought, I decided to put EEF’s full support behind the initiative. The cost of regulation is a big issue for manufacturing and business generally. While growth is stalling, the regulations weighing down on the UK economy continue to mount up. Between 2002 and 2010, the cost to UK business of new regulations more than doubled from £5bn in 2002 to in £11.5bn 2010.
Furthermore, I took the view that industry will get out of this exercise what it puts in into it and if we don’t take this opportunity to tell the government which regulations are working and which are not, we can’t then blame them for not addressing the issues that are hampering business growth.
On a personal level, I have taken on the role of ‘sector champion’ for manufacturing in the Red Tape Challenge. This has involved promoting the initiative and encouraging manufacturers to get involved. It has also allowed me to participate in some of the government’s internal ‘challenge’ sessions, where senior officials have to identify which regulations they believe can be scrapped and justify all of those that they propose should be kept.
At an organisational level, EEF has worked hard to engage with our members and get their views on red tape. We have spoken to hundreds of companies to find out what the most important issues are for them.
This has yielded a wealth of information on how regulation is impacting on manufacturing companies in a wide range of areas, from environmental rules and health safety to the administration of business taxes and company reporting.
A key area of concern is employment law, where manufacturers feel that a host of domestic and European regulations create unnecessary costs and have unintended consequences which make a running a business increasingly difficult at a very challenging time.
Examples include the abolition of the Default Retirement Age which acts as a major barrier to succession planning, an employment tribunal system that promotes vexatious claims, unnecessarily burdensome collective redundancy rules and the well-intentioned ‘Fit Note’ system that too often still leaves employers in the dark as to what activities employees returning from illness are fit to undertake.
Concerns in other areas include the export licensing process, which for too many companies takes too long and is too opaque, and waste packaging regulations that can impose an administrative burden disproportionate to the environmental gain.
EEF’s backing for the Red Tape Challenge however, is not unconditional. In return for promoting the initiative, we expect manufacturers’ views to be taken seriously and for the government to deliver substantive reforms that make it measurably easier to do business.
So, has my experience of the process so far vindicated the decision to get involved? While the final judgement will have to wait until the exercise is complete some time next year, there are some promising signs.
The government has put significant resource behind the Red Tape Challenge. Those involved, right up to and including the ministers in charge, are taking the exercise extremely seriously. From the private meetings I attended I can assure business leaders that officials defending regulations have been subject to robust challenge and there has been a genuine desire to ease the burden of regulation wherever possible.
A number of important tests for government however, will shortly have to be addressed in areas such as employment law, health and safety and environmental regulation where the interpretation of EU Directives and commitments made as part of the Coalition Agreement will have to be dealt with meaningfully if the Red Tape Challenge is to be successful.