Red Tape Reduction Plans Welcomed by Business Groups

Business groups have welcomed the coalition Government’s plans to set up a Reducing Regulations Committee to cut the burden of red tape on small businesses.

Announcing the new committee this week, business secretary, Vince Cable, said it would review business laws due to be introduced between June 2010 and April 2011 to ensure they do not present an unreasonable cost to small firms.

Research by the Forum of Private Business (FPB) last year showed that meeting regulations costs smaller employers a total of £9.3 billion a year and takes them on average 37 hours a month.

Central to the new committee’s role will be monitoring the new “one-in, one-out” approach, which will ensure a new law is only brought in when an existing one is removed. A “challenge group” within the committee will look at ways to reach the Government’s social and environmental goals without introducing new regulation.

Business groups welcomed Cable’s announcement.

“Our calls for a comprehensive review of red tape finally appear to have been heard,” said the FPB’s chief executive, Phil Orford. “With the one-in, one-out approach and the work of the challenge group, we look forward to an enterprise culture that is conducive, rather than restrictive, to small-business growth.”

The Federation of Small Businesses public affairs spokesman, Stephen Alambritis, said:

“We hope the one-in, one-out rule will be followed through, and that regulations that come in are not more burdensome than regulations being cancelled.

“Ministers are likely to leave the flagship policies in place and look for small bugbears that are easy to get rid of.”

The British Chambers of Commerce director general, David Frost, warned that, despite the positive move, the coalition Government will be subject to the same high levels of scrutiny by small business groups as any previous administration.

Vince Cable explained the creation of the new committee by saying that the “deluge” of new laws had been “choking off” enterprise for too long.

“We must move away from the view that the only way to solve problems is to regulate,” he said.

“We need to reduce regulation and at the same time meet our social and environmental ambitions,” Vince Cable added. “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.”

Red Tape Reduction Plans Welcomed by Business Groups

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