Cautious welcome for Cable’s red tape crusade
BUSINESS leaders have given a cautious welcome to government plans to reduce red tape on business.
Business secretary Vince Cable has announced a raft of proposals to reduce the bureaucratic burden on enterprise, including a commitment to a ‘one in, one out’ system to ensure the impact of any new laws is balanced by the removal of old ones.
The plan includes a new cabinet ‘star chamber’ to spearhead the drive to reduce red tape, an immediate review of all forthcoming regulation, and a new ‘challenge group’ team charged with devising innovative non-regulatory solutions.
Richard Lambert, CBI Director-General, said: “We welcome this approach to controlling and reducing the ever-growing burden of regulation. But it is only the first step in a process, which will require a major cultural change in Whitehall and innovative new thinking about the government’s whole approach to risk and regulation.”
Chief executive of the Forum of Private Business Phil Orford said: “Our calls for a comprehensive review of red tape finally appear to have been heard. The first job of the new star chamber will be to scrutinise all new regulations that are in the pipeline and that has to be welcomed.
“The Government must ensure that, in administering the work of the Reducing Regulation committee, it does not create more bureaucracy to deal with red tape.
“If this is achieved, combined with the ‘one in one out’ approach and the work of the challenge group in devising innovative, non-regulatory solutions to social and environmental challenges, we look forward to an enterprise culture that is conducive to small business growth rather than restrictive, as we have at present with the record levels of red tape that exist.”
Last year, the Forum’s ‘Cost of Compliance’ survey revealed that red tape costs smaller employers £9.3 billion per year in internal costs, mainly the time spent on administration, and found they spend an average of 37 hours per month complying with the law.
According to the FPB’s research, at £2.4 billion the amount spent by smaller businesses on employment law is the highest out of all seven different types of legislation categorised in the quarterly survey, called Referendum. It surpasses the £2.1bn per year spent on health and safety administration and £1.8bn on tax
In all, 81% of businesses surveyed said the existing regulatory framework was unrealistic, not robust and unfair.
Business Secretary Vince Cable said: “The deluge of new regulations has been choking off enterprise for too long. We must move away from the view that the only way to solve problems is to regulate.
“The Government has wide-ranging social and ecological goals including protecting consumers and protecting the environment. This requires increased social responsibility on the part of businesses and individuals.
“This is a real challenge and it will not be easy. We need to reduce regulation and at the same time meet our social and environmental ambitions. This demands a radical change in culture away from the tick box approach to regulation only as a last resort. It’s a big task but one worth striving for.”
