Ministers plan latest red tape bonfire

Ministers today signalled a new plan to reduce the burden of red tape regulations on UK businesses, particularly benefitting smaller firms.

The facts:

The proposals, the latest in a long line of moves to curb the burden of form-filling on entrepreneurs, will set a “rolling limit” on the cost of new regulations prescribed by each government department.

Departments such as Business, Enterprise and Regulatory Reform (BERR) will also have to offset the cost of new rules by trimming existing rules or trading allowances with other government groups.

The new budgets will be introduced in 2009, according to business secretary John Hutton. If the plans go ahead, Britain would be the first country in the world to restrict departments’ right to produce new laws.

In a caveat, Whitehall will still be able to legislate freely against climate change and will retain the right to push through laws in cases of emergency.

They said:

"Good regulation should drive competition and boost our productivity. But too many new rules can stifle enterprise and blunt our competitive edge,” said Hutton in a statement ahead of a public consultation on the plans.

"If the UK is to remain a respected place to do business, we must not expect business simply to absorb the costs of a stream of new government initiatives. The introduction of a regulatory budget [will] act as a powerful incentive for departments to cut or streamline existing burdens.

Sally Low, director of policy at the British Chambers of Commerce, said: "In the current economic climate proposals which aim to reduce the burden of regulation will help to ease many of the pressures on companies across the UK"

Richard Allen, hairdressing salon owner based in Canterbury, said: "Due to the costs of the burden of red tape, we have had to reduce the number of staff we employ; we've gone from having 14 to 8 employees."

We say:

Anyone who’s been in business for a while will find it hard to get excited by yet another government commitment to cut red tape. There have been thousands over the last 10 years. That said, the stated plans have the air of 'concrete action' about them.

The proof, as always, will be in the eating. Look out for the ‘limited budgets’ and how much they save businesses compared to the unrestricted. Also be aware of the 'trading scheme' which sounds like ministers having leave to 'buy' red tape from each other when budgets run low.

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By News Desk  on   Aug 06,2008

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Keywords

John Hutton    red tape    Whitehall    small business    politics    cash-flow   

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