Government Bins Business Red Tape

Business will be freed from the burden of red tape under a package of sweeping reforms to regulation, it was announced today.

In a speech to the Federation of Small Businesses (FSB) in Liverpool, Mark Prisk revealed Business Secretary Vince Cable’s plans for a range of measures to be included in the Growth Review that will allow businesses to grow, including:

  • a public audit of almost 22,000 statutory instruments that are currently on the statute book; and
  • a moratorium to exempt businesses with fewer than ten employees and genuine start ups from new domestic regulation for three years.

For the public audit, the legislation will be grouped into themes on a dedicated website and businesses will be asked to tell the Government what they think of those regulations and how to improve the system.

The intention will be that any overly burdensome or unnecessary regulations are removed unless Departments can prove there is a good reason for them.

The moratorium will be preceded by extensive engagement with businesses and other groups over the coming weeks to ensure that this is introduced in a way that does not have any unintended consequences for business.

Business Secretary Vince Cable said:

“I promised bold action to remove barriers to growth. Today, I am setting out how this will happen in the vital area of business regulation.”

“A moratorium for the smallest and genuine start-up companies from regulations alongside the removal of obligations for flexible working and giving time off to train will be a real boost to businesses. It will let them concentrate on growing their company, not thinking about dealing with the latest request from Government.”

“It’s not right that businesses should have to deal with years of Government intervention by abiding by arcane rules. That’s why I am asking them to help us take a comprehensive look at the stock of regulation and tell us how rules and regulations affect them. This is the first time such a radical look at the statute book has been taken and we’re giving you the chance to play your part. I’d encourage all businesses, large and small to grab it with both hands.”

Other measures, identified as part of the growth review into regulation include:

  • Repealing the regulations extending the right to request flexible working to parents of 17 year olds for all businesses, which was due to be introduced on 6 April 2011;

  • Not extending the right to request time off to train for firms with less than 250 people;

  • Introducing more transparency into the Government’s One-in, One-out rule by publishing the opinions of the Regulatory Policy Committee where they do not believe the evidence supports a new regulation; and

  • Lightening the audit requirements of smaller firms by matching the minimum required by EU directives, freeing small companies from unnecessary audit fees.

Chairman of the Better Regulation Executive Sir Don Curry said;

“For some time now, I have been pressing Government to recognise the burden regulation places on our small and micro-businesses. So, I am delighted that this exemption has been introduced. I would urge Government to continue to look at measures such as this to continue to help economic growth.”

The Government also announced that next week the Government will be publishing details of how it is introducing sunset clauses into new regulations. New regulations will be reviewed after five years to see if they are effective, if they are still necessary, and whether the costs to business can be reduced. If they are found to be working as expected, the regulation will be extended for a further five year period.

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