Burden of regulation on UK businesses ‘too high’

News Article - 26 December 2011
Category: Regulatory

A new report released by the British Chambers of Commerce (BCC) has attacked the Government's efforts to tackle red tape, insisting the burden of regulation on UK businesses is still too high.

The paper,Red Tape Challenged?suggests the Government's new regulatory framework is inconsistent and lacks transparency for SMEs.

The BCC analysed impact assessments (IAs) by Government departments and the feedback from the Regulatory Policy Committee in an effort to examine the Government's progress at reducing the effects of red tape on businesses.

Over the past 12 months the coalition has made a concerted effort to reduce red tape for SMEs, but the BCC's report reveals the systems and procedures implemented remain inconsistent and require strengthening.

John Longworth, director general of the BCC, said: "Regulation affects businesses every day. While some regulation is necessary to improve markets, an excess can add unnecessary burdens and hinder growth among businesses.

"Needless regulation creates uncertainty, and damages productivity, distracting firms from innovation and expansion.

"It is crucial that the drive to reduce the regulatory burden is treated as importantly as all other aspects of economic policy."

Despite the Government's aim to improve the transparency of the regulatory process the October Common Commencement Date saw the introduction of new regulation, costing businesses up to £45 million.

The coalition's implementation of a 'one-in one-out' approach, designed to encourage departments to outlaw old laws and introduce new ones to reduce regulatory burdens on businesses, is flawed according to the BCC.

The body believes many of the new regulations installed are out of the scope of the initial remit of the 'one-in one-out' policy, with many either European in origin or relating to non-applicable areas including green and tax rules.

It was revealed 42 per cent of regulations fell outside of the 'one-in one-out' approach which would appear disproportionately high. In effect, UK businesses are therefore feeling the effects of more, rather than less, regulation.

Article keywords: uk business, regulation

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