Deputy Prime Minister announces deregulation measures
25 October 2011
The Deputy Prime Minister, Nick Clegg met with small business leaders on Tuesday (October 25) to announce a new system of regulation "designed for busy, working people". "The Coalition is on a mission to liberate small business," he said. "We have set ourselves the challenge of being the first British Government to leave office having reduced the overall burden rather than increased it."
The Red Tape Challenge, which invites ordinary people to identify overlaps, complexity and to highlight where the benefits do not justify the costs, has already looked at 400 regulations in retail and hospitality. Over half – 220 – will be simplified or scrapped.
Mr Clegg claimed that the Coalition’s attack on red tape has already saved British businesses £3bn, with a further £600m worth of savings coming just from the decision to exempt more companies from being audited.
Mr Clegg also had an announcement to make on the subject of enforcement. "There are a range of bodies responsible for inspection: HMRC, the Environment Agency, the Health and Safety Executive, to name a few," he said. "And they need to undergo this culture change too. They need to understand that their job is to make your life easier, not harder.
“So there will be a major shake up of business inspection - going through the regulators, asking ‘are they still necessary?’; ‘Should they still exist?’; making sure that, yes, they intervene when necessary, they offer advice and support, but otherwise they let you get on with it."
He promised to minimise the number of authorities that companies have to deal with in the future, introducing sunset clauses for new regulators, placing them under rolling revie. "If they become irrelevant, or their functions are replicated elsewhere, they’ll go,” said Mr Clegg.
EEF policy director, Steve Radley said that business will welcome any efforts to cut the burden of regulation. However, he sees a potential contradiction in that government is looking to cover the costs of these inspection bodies by charging fees for their intervention and, in effect, making industry pay to be regulated.
"In seeking to balance budgets, the emphasis has to be on taking a more proportionate risk-based approach and not relying on charging fees. It is vital that interventions by regulatory bodies are only targeted where there is significant risk and government policy should reflect this,” said Mr Radley.