Business secretary Vince Cable has unveiled plans to curb the ‘excessive regulation that is stifling the growth of small businesses’.
The pledge to reduce red tape, which is frequently cited by small business owners as the biggest barrier to hiring staff, follows prime minister David Cameron’s vow to “re-open Britain for business”.
“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,” said Cable.
The coalition’s ‘action plan’ for cutting red tape includes: the creation of a new Cabinet ‘star chamber’ (the Reducing Regulation Committee), chaired by Cable, which will lead the efforts to reduce red tape and an immediate review of all pending legislation inherited from the Labour administration, which the new government said will cost £19.1bn a year to implement after April 2011.
A new ‘challenge group’, with a mandate to find ways of achieving social and environmental goals without legislating, will also be established, along with a ‘one-in, one out’ approach to new laws to control the red tape burden and ensure any new regulatory cost is compensated by cuts to the cost of old laws.
Cable said that reducing the level of business regulation while safeguarding protections for consumers and the environment would be “a real challenge and it will not be easy”, adding that it will require increased social responsibility on the part of businesses and individuals.
“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.”
The moves have been applauded by small business lobby groups and their members.
Phil Orford, chief executive of the Forum of Private Business (FPB), 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.”
A recent survey by the FPB found that regulatory compliance costs small businesses £9.3bn a year, with the average employer spending 37 hours a month on paperwork and other requirements.
© Crimson Business Ltd. 2010