New red tape rules a boon for business

Business Secretary Vince Cable has outlined plans which, it is claimed, will tackle the level of unnecessary red tape firms have to deal with.

According to the Government, the new package of measures - due to come in at the start of September - will "transform the relationship" between legislators and those impacted by their policies, ensuring that regulation becomes a "last resort".

The measures are set to be spearheaded by a 'one in, one out' system. This new scheme aims to bind ministers seeking to introduce new legislation which will impose costs on businesses to first identify existing rules which have a similar financial impact. This cost aspect will then be "exchanged" - the idea being there will be no net increase in the regulatory burden businesses must shoulder.

The Government says that the system should see regulations facing more rigorous tests before being introduced, and brands it a "radical new approach" to the way that Whitehall operates.

Mr Cable said that it demonstrated a "common-sense" attitude to new laws.

"Together these measures represent a fundamental shift in how Whitehall has traditionally used regulation as a way to command and control," he added.

"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."

The policy is set to be overseen by the Regulatory Policy Committee (RPC), the independent body created at the end of 2009 whose job is to scrutinise the Government's policy-making process.

Among other measures, the Government has pledged a "rigorous approach" to EU regulations and the so-called practice of 'gold-plating'. It has promised to engage with Brussels policy-making at an earlier stage and ensure that, when regulations are transposed into UK law, they will not put domestic businesses at a disadvantage when competing with companies based on mainland Europe.

Lighter-touch intervention?

In welcoming the announcement, the Forum of Private Business - which found that red tape cost small firms £9.3 billion last year in internal costs - said it would wait and see how well the Government could follow through on its promises.

FPB head of campaigns Jane Bennett stressed that the RPC's role was essential to oversee the shift from what she termed the current "over-regulation", to "lighter-touch intervention".

Warning that the announcements must be backed up by "a change in behaviour for many Government departments", she added: "The concept of introducing regulations only as they are needed is absolutely necessary given the existing burden on small businesses."

Meanwhile, Dr Adam Marshall, director of policy at the British Chambers of Commerce (BCC), said that the policy represented a step forward.

"At a time when business needs every chance it can get at driving economic growth, the beefed-up role for [the RPC] is essential," he added.

"Now that the new administration's regulatory mechanics have been announced, they must show tangible results - so that businesses can see the benefits as soon as possible."

IMAGE Thomas Carlgren/Scanpix/Press Association Images

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