Mark Prisk, Minister of State for Business and Enterprise, discusses how the government’s battle against bureaucracy will benefit businesses in a recent blog for www.conservativehome.blogs.com
Every government wants to leave its mark on the statute book. The last government did so by introducing the equivalent of six new regulations every working day, or 30 every single week. This government will do so by reducing the regulatory burden that weighs on all firms, but disproportionately on micro, small and medium-sized enterprises.
Labour’s legacy was a business community suffocated by rules, many of them contradictory or redundant. When it did cut red tape, it did so lengthwise.
That approach had to change whatever the economic environment and today’s push for growth makes deregulation urgent. This government is more committed to the supply-side reforms that make life easier for business than any before it. To achieve this, the Government has launched two key initiatives. Firstly, the one-in-one-out rule places a cap on the financial burden of regulations to businesses by ensuring that the cost of any new UK-based regulation is offset with a commensurate reduction in existing regulation. The net saving to businesses for 2011 is estimated by the Business Department at £3.2bn.
Qualitative improvements to other regulations will also spur growth. Some, for example, help drive the development of a low-carbon economy by easing planning restrictions on the development of electric vehicle charging points, domestic wind turbines and heat pumps. Others are aimed at businesses with fewer than 250 employees, such as withdrawing the right to request time to train. The other key policy is the Red Tape Challenge (RTC). Whereas the one-in-one-out rule stems the flow of new regulations onto the statute book, the RTC tackles the existing stock of red tape. This is an enormous undertaking, involving a comprehensive and thorough economic analysis of the no fewer than 21,000 regulations on the statute book, of which some 11,000 directly affect businesses.
More than 1,200 regulations have been considered so far, and we have agreed to scrap or substantially improve over half. Changes include replacing 12 pieces of legislation on consumer protection and information with a single Consumer Rights Bill; scrapping the paper counterpart to the driving licence, saving motorists up to £8m; and streamlining procedures for manufacturing export control. Many arcane and obsolete regulations have also been scrapped, including the 98 Trading with the Enemy regulations (restricting companies’ dealings with such threats to national security as Belgium and the USSR), regulations dictating the location and design of no smoking signs, or guidelines specifying the roads on which dogs must be held on a lead.
This is not a scorched-earth policy on bureaucracy. Limited, clear and effective regulation guarantees that employees, consumers and the environment are protected – and the Government is in fact consolidating and simplifying procedures for identification for goods such as tobacco, alcohol and knives in order to make controls more effective. But the bureaucratic behemoth of recent decades has tilted the playing field in favour of large corporations that can pay lawyers, accountants and human resources teams to cut through the reams of red tape and search for loopholes. SMEs and micro-businesses are forced to choose between hiring legal professionals and taking on the employees they need to expand their business.
There is still a lot of work to be done, particularly in limiting the regulation coming in from Europe, which accounts for 50 per cent of the burden. We are pushing hard to reduce the volume and impact of EU regulation, not least by testing all proposed EU measures for their impact on growth and by ending the routine practice of gold-plating EU rules. Our assault on burdensome regulation reflects the core values of this Government – personal responsibility, individual freedom, support for risk-takers and job creators, and trust in people to make common sense decisions. This painstaking and long overdue review of a century of regulations will play a critical part in delivering the economic growth we need.