01454772727 mail@harwoodlane.co.uk

CBI lays out proposals to reduce red tape

11th December 2012

Regulatory red tape from the UK Government and from abroad is damaging the country's competitiveness, international investment and economic growth, the Confederation of British Industry (CBI) has said.

According to a new CBI report, the Government needs a tighter grip on the millions of pounds worth of regulatory burden in the UK, where there is 'too little detailed thinking' about the real impact it has on businesses.

The CBI report found that:

  • policies created in 2011 alone could increase the cost of regulation on UK businesses by £177.7 million
  • for every £3 of regulation removed in 2011, another £5 was added
  • poor regulation is hampering job creation, with small and medium sized businesses most affected

Launching the report, the CBI's chief policy director Katja Hall, said: "Regulation has an essential role to play in a thriving market economy, promoting competition and protecting consumers, but we know it can be a major barrier to growth."

"Small and medium-sized businesses are the engines of growth, but they're telling us they are drowning under the weight of extra regulation coming out of Whitehall, layered on top of outdated red tape which has not been repealed."

Although the CBI welcomed the Government's ongoing commitment to reducing red-tape through the red tape challenge, the 'one in one out' rule and announcements made in last week's Autumn Statement to strengthen regulatory power, it says that more needs to be done.

It has set out eight steps that the Government should take to improve the regulatory regime:

In the short term

  • making the Regulatory Policy Committee fully independent 
  • implementing 'sunset clauses', regulations that automatically expire at a set date unless renewed
  • strengthening of Impact Assessments, the policy review process 

In the medium term

  • giving economic regulators more accountability to their individual sectors 
  • greater scrutiny of regulations by Parliament 
  • greater publicity of departmental regulatory reviews

In the longer term

  • greater flexibility to remove or amend existing regulation 
  • outsourcing of policy ideas to a wider range of sources

Click here for ICAEW website  Click here for SAGE website