Costs of over-regulating business

John Page · 16-01-2006, 11:05 AM

First, the Tories' reaction to the Bill - http://www.conservatives.com/tile.do...&obj_id=127186

Quote:

Legislative and Regulatory Reform Bill is a start

Commenting on the Legislative and Regulatory Reform Bill published today, Alan Duncan, Shadow Secretary of State for Trade & Industry said:

"Since 1997, Great Britain has fallen from fourth to thirteenth in the World Economic Forum Global Competitiveness League. One of the factors in that slump was our fall from eleventh in the world to twentieth in the world in terms of our regulatory burden.

"We are concerned that the Government has not done anything to prevent the build-up of further regulation and that it has not indicated what resources it will commit to deregulation, nor how much of the existing stock of regulation we should expect to see addressed in coming years.

"Tackling regulation means changing the culture in government departments. This bill is not implementing the 'one-in, one-out' regulatory structure and the regulatory budgets which the Government's own Better Regulation Taskforce recommended before the last election.

"What Britain needs is a radical change in practice supported by further legislation if necessary to restrict the flow of regulation at its source."

Incidentally, the site is now branded "Cameron's Conservatives"!

This from eGov 12 January - http://www.egovmonitor.com/node/4164 -

Quote:

Cabinet Office Minister Jim Murphy today introduced a Bill to Parliament that would provide a swift and effective mechanism for delivering the Government's radical regulatory reform programme to cut red tape.

The Legislative & Regulatory Reform Bill aims to make it quicker and easier to tackle unnecessary or over-complicated regulation and help bring about a risk-based approach to regulation.

The Bill would help deliver a number of the wide-scale reforms announced in the Better Regulation Action Plan in May 2005 - a programme that has been widely endorsed by business, public sector and voluntary sector stakeholders.

It would do this primarily by creating a wider law reform power than that in the Regulatory Reform Act 2001. This will allow the Government to deliver reform of outdated or over-complicated legislation more quickly, and enable the mergers of those regulators not currently covered by separate legislation.

Jim Murphy, Cabinet Office Minister, said:

"The Legislative and Regulatory Reform Bill marks a crucial step toward a Britain free from unnecessary red tape.

"The Bill is good news for business, the public and voluntary sectors. The 2001 Regulatory Reform Act delivered significant benefits to these sectors, but does not go far enough to meet the demands of the Government's radical new agenda for regulatory reform.

"The new Bill aims to make it simpler and faster for us to cut the burden of regulation and embed a light-touch, risk-based approach to regulation. It will enable us to deliver long-term benefits to the UK economy and improve our status as one of the world's most attractive places to do business.

"The Bill is essential to deliver our wider radical regulatory reform programme. We are measuring how much red tape costs businesses and voluntary organisations so we can cut it, consolidating the number of national regulators, and driving through ambitious plans to simplify or reduce unnecessary bureaucracy across Government by as much as 25%. This can bring a saving to the UK economy of £10bn - the equivalent of 1% of GDP."

The Bill includes:

A new power to reform outdated, unnecessary or over-complicated legislation, enabling regulatory reform to be delivered swiftly and efficiently. This power to reform the law by order is intended to be used to implement:

* Measures identified in departments' simplification plans (due by the end of 2006)
* Uncontroversial Law Commission recommendations (including those reforming the common law)
* Structural reform of regulatory bodies, including those Hampton mergers not being taken forward through separate legislation

There are safeguards in the Bill limiting the circumstances in which the power can be used, including measures to guarantee appropriate levels of consultation and Parliamentary scrutiny.

Measures to encourage a risk-based approach to regulation and inspection by requiring regulators to have regard to the independent Better Regulation Commission's five principles of good regulation. These principles will embed a risk-based and proportionate approach to better regulation, encouraging effective enforcement.

Measures to make legislation coming from the EU easier for UK organisations to deal with. The Bill will reduce the number of pieces of domestic legislation needed to implement an EU directive in the UK, and make new obligations more transparent and easier to understand for British organisations affected by them.

Stakeholder support:

John Cridland, CBI Deputy Director-General, said:

"The Better Regulation Bill is a key plank in the foundations of the Government's better regulation agenda, and the ability to deliver more regulatory reforms quickly and efficiently is good news for business. Crucially, the Bill seeks to bring about a lasting culture change in officials' attitudes to risk and regulation, which is the real prize for business."

John Walker, Federation of Small Businesses National Policy Chairman, said:

"Regulatory burdens are amongst the main barriers to growth with which our members struggle. If this Bill can reduce them and free up their potential economic growth, unlike previous deregulatory attempts, this will be genuinely good news for the small business sector."

James Walsh, Institute of Directors Head of Regulation, said: "This Bill is about putting in place the right machinery to help deliver the Government's reform plans and slash costly over-regulation. We welcome what it stands for, provided it is accompanied by the necessary culture change across Whitehall in order to fully deliver benefits and help businesses to focus more on innovation."

David Frost, Director General of the British Chambers of Commerce, said: "Employers warmly welcome this Bill which could be a major step forward in the drive to reduce the burden of regulation on business. Complicated and costly regulations are one of the main barriers to business growth, especially for smaller companies. Employers will now be looking for the Government to fully implement its programme and achieve a NET reduction in the costs of complying with regulation."

Better Regulation Commission Chair Rick Haythornthwaite said:
"I welcome the introduction of this Bill, which will enable the government to deliver simplification proposals - including the removal of outdated, unnecessary or complicated legislation - quickly and efficiently."

My emphasis.

If this relatively limited programme can deliver 1%, then the standard 2% benefit quoted from repeal of EU-generated business legislation looks a doddle.

Did I miss UKIP's comment?

Aardvark · 16-01-2006, 11:53 AM

This is probably a con.

The solution to over regulation is not to introduce regulations in the first place. This has become practically impossible since Parliament has little time to 'scrutinise' compulsory EU regulation as it is. Most of it now goes through on the nod or by way of Statutory Instrument. Given that MEPs of all parties don't have time, or more probably inclination, to properly scrutinise the mass of regulation that comes from the Commission I predict that the act will not save £10 billion a year. The real costs to industry have now increased to the extent that business is no longer creating sufficient jobs to take up the unemployed. The public sector, which ignores a lot of the regulations that constrict business, or spends vast amount of taxpayers money implementing them, is the only growth sector in our economy. This Bill is too little too late.

John Page · 16-01-2006, 12:12 PM

Quote:

This Bill is too little too late.

Yes, of course.

The key thing about the announcement is the government's guess of 1% benefit just from tinkering at the edges.

But I go with the argument that calling for better regulation misses the point, it has to be less regulation. And with around 50% of it coming from the EU, we know what that means.

These numbers also highlight what a big issue this is for UKIP. We need somebody UK-based concentrating on it, working up policy, liaising with business bodies, and issuing releases.

This is not a matter of a collegial research group staying in the background until the next election, it is a matter of getting someone out there now.

This also chimes in with the thread where you ask rhetorically if we should be the economically liberal party - http://www.ukipforum.co.uk/viewtopic.php?p=83792

harryaldridge · 16-01-2006, 04:08 PM

I saw this a while ago. The guy running the project is the kind of guy who will deliver savings but it such an un-ambitious target.

We know there is not point in this because of all the EU directives that flood here in their masses.

It strikes me a bit like Brown's civil service cut - 80,000 jobs to go. But hang on a minute...they planned to recruit an additional 350,000 odd. So what was dressed up as a cut was actually a smaller increase.

This is exactly the same - cutting a few regulations but introducing far more in the background.

What we need is a "one in, one out" policy that required government to cut one regulation of equal cost before introducing another. Or how about a cap on the total regulatory cost tied to a certain % of GDP. These kind of policies would make the British investment climate more favourable and stimulate economic activity.

Paul Birch · 16-01-2006, 05:54 PM

Quote:

"The Bill is essential to deliver our wider radical regulatory reform programme. We are measuring how much red tape costs businesses and voluntary organisations so we can cut it, consolidating the number of national regulators, and driving through ambitious plans to simplify or reduce unnecessary bureaucracy across Government by as much as 25%. This can bring a saving to the UK economy of £10bn - the equivalent of 1% of GDP."

This is a complete con. Governments (and opposition parties) promise this sort of saving all the time. They never deliver. They never could deliver without relinquishing the authoritarian control those politicians and bureaucrats thirst for.

"Measuring how much red tape costs businesses ..." will require more bureaucrats to do the extra work! See "Yes Minister" for details!

Quote:

The Bill includes:
A new power to reform outdated, unnecessary or over-complicated legislation, enabling regulatory reform to be delivered swiftly and efficiently. This power to reform the law by order is intended to be used to implement:
* Measures identified in departments' simplification plans (due by the end of 2006)
* Uncontroversial Law Commission recommendations (including those reforming the common law)
* Structural reform of regulatory bodies, including those Hampton mergers not being taken forward through separate legislation

Here's the real reason for the Bill: to extend the government's power to impose secondary legislation without parliamentary scrutiny or public approval.

Quote:

There are safeguards in the Bill limiting the circumstances in which the power can be used, including measures to guarantee appropriate levels of consultation and Parliamentary scrutiny.

Yeah, right. Like there were supposed to be safeguards preventing the abolition of the no-double-jeopardy rule from being abused - yet already we are seeing people duly acquitted of even relatively minor offences (such as speeding) forced to face retrial.

Biscuitman · 16-01-2006, 10:53 PM

Quote:

We are measuring how much red tape costs businesses and voluntary organisations so we can cut it, consolidating the number of national regulators, and driving through ambitious plans to simplify or reduce unnecessary bureaucracy across Government by as much as 25%. This can bring a saving to the UK economy of £10bn - the equivalent of 1% of GDP."

The Better regulation Task Force identified the cost of regulation to UK industry at £100 billion a year i.e. 10% of GDP.

1% wont even be noticed.

What was the governments response to the findings?

They set up another quango to check the BRTF's findings!

spaman · 20-01-2006, 02:18 PM

Typical of this government that they think they can cure everything by more legislation......even red tape...

The admitance that there is so much red tape should help the cause

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16-01-2006, 11:53 AM	#2 (permalink)
Aardvark Moderator Join Date: Dec 2004 Location: Oxonia Posts: 3,987	This is probably a con. The solution to over regulation is not to introduce regulations in the first place. This has become practically impossible since Parliament has little time to 'scrutinise' compulsory EU regulation as it is. Most of it now goes through on the nod or by way of Statutory Instrument. Given that MEPs of all parties don't have time, or more probably inclination, to properly scrutinise the mass of regulation that comes from the Commission I predict that the act will not save £10 billion a year. The real costs to industry have now increased to the extent that business is no longer creating sufficient jobs to take up the unemployed. The public sector, which ignores a lot of the regulations that constrict business, or spends vast amount of taxpayers money implementing them, is the only growth sector in our economy. This Bill is too little too late.

16-01-2006, 04:08 PM	#4 (permalink)
harryaldridge Senior Member Join Date: Oct 2005 Location: West Sussex Posts: 1,912	I saw this a while ago. The guy running the project is the kind of guy who will deliver savings but it such an un-ambitious target. We know there is not point in this because of all the EU directives that flood here in their masses. It strikes me a bit like Brown's civil service cut - 80,000 jobs to go. But hang on a minute...they planned to recruit an additional 350,000 odd. So what was dressed up as a cut was actually a smaller increase. This is exactly the same - cutting a few regulations but introducing far more in the background. What we need is a "one in, one out" policy that required government to cut one regulation of equal cost before introducing another. Or how about a cap on the total regulatory cost tied to a certain % of GDP. These kind of policies would make the British investment climate more favourable and stimulate economic activity.

20-01-2006, 02:18 PM	#7 (permalink)
spaman Senior Member Join Date: Jan 2005 Location: Kent Posts: 894	Typical of this government that they think they can cure everything by more legislation......even red tape... The admitance that there is so much red tape should help the cause