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Michael Fallon and Ken Clarke set out how the government is increasing the pace of the government’s drive to cut red tape.
Ministers promise further action to remove obstacles to growth.
Business Minister Michael Fallon and Cabinet Office Minister Ken Clarke today (27 January 2014) set out how the government is increasing the pace of the government’s drive to cut red tape, abolishing or improving outdated, burdensome or over-complicated regulations which waste businesses’ time and money.
The commitment follows Prime Minister David Cameron’s announcement today that more than 3,000 regulations have been identified for scrapping or improvement through the Red Tape Challenge since 2011, and that the government will be the first to reduce the overall burden of domestic regulation.
More than 800 regulations have already been abolished or improved, including major reforms to employment and health and safety law and simplification of environmental legislation, giving businesses more freedom to grow. The government intends to implement the remainder of the reforms in this Parliament, prioritising those of most help to business.
Data released today shows that Red Tape Challenge – which asks businesses and the public themselves to identify the rules that hold them back – is already saving firms some £300 million per annum, and is expected to deliver business savings of over £850 million a year once all measures are implemented.
Further cuts to red tape being announced today include:
- helping house builders by cutting down 100 overlapping and confusing standards applied by councils to new homes to less than 10. Any necessary remaining standards will be consolidated as far as possible into Building Regulations to avoid duplication and confusion. We aim to make significant progress on this over the rest of this Parliament. The reforms are estimated to save around £60 million per year for home builders
- making it vastly easier and cheaper for businesses to meet environmental obligations - by March 2015 Defra will make environmental guidance simpler, quicker and clearer to understand, reducing 100,000 pages of environmental guidance by over 80% and potentially saving business and others £100 million per year
- eliminating millions of pieces of unnecessary paperwork to record waste management. Environmental regulations require all businesses to have a paper-based audit trail for any waste they produce, carry, keep, import or dispose of to show that they have passed their waste over to an authorised recipient. The Environment Agency are this week replacing this with an electronic system, eliminating the need for 23.5 million paper Waste Transfer Notes each year & from 2015 all 2.1 million small companies will be able to file their company accounts to Companies House and HMRC and annual return information once easily online at the same time
- too many people think that you can’t use a ladder at work: new Health and Safety guidance published this week will make clear that you can, helping the 10 million people who work at height in this country
The Deregulation Bill, introduced to Parliament on the 23 January 2014, will reinforce the government’s war on the unnecessary bureaucracy that costs British businesses millions, slows down public services and hinders millions of individuals in their daily lives.
The Bill will remove at least one million self-employed people from Heath and Safety regulation, impose a new ‘growth duty’ on regulators and reduce alcohol licensing burdens.
Minister for Business Michael Fallon said:
Changing the culture of government, stripping away obsolete or restrictive rules and getting regulators to put growth first is not an overnight task. But the excellent progress we’ve made shows the government is on track to be the first to reduce, not expand, the rulebook for business.
The Red Tape Challenge is effective because it responds to those with day-to-day experience of running or working for a business. It has already scrutinised over 5,600 regulations which have an impact on businesses, and we’ll remove or slim down 3,000 of those.
We are determined to increase the scale and pace of progress on the better regulation agenda – at home and in Europe. On my watch, the government will continue to support our job creators and put enterprise before bureaucracy every time.
Minister without Portfolio Ken Clarke said:
If it is effectively to protect the interests of consumers and the safety of the public, regulation must be sensible and proportionate. But in many areas in recent years, we have seen red tape grow out of all proportion, surpassing what is necessary and costing businesses and public services millions.
By building on the vital work of the Red Tape Challenge team and removing some of this unnecessary red tape, the Deregulation Bill makes an important contribution to reducing costs and time-wasting burdens on managers in order to improve and unleash the potential of British businesses to compete not just domestically, but around the world.
The hundreds of Red Tape Challenge reforms introduced include:
- giving more businesses flexibility to decide whether their accounts should be audited. One part of this package alone, the new audit exemptions for subsidiaries, is estimated to save over £60 million per year
- new rules to enable ‘pioneer’ lane rental schemes, providing incentives for works on the busiest roads to be done at off-peak times and estimated to save business over £27 million per year.
- helping over 1 million businesses so far from wasting time over-complying with health and safety law through the Health and Safety Executive’s myth busting Challenge Panel
- changes to collective redundancy rules mean that businesses can restructure more effectively whilst ensuring that employees have access to good quality consultations, saving businesses £66.43 million a year in administrative costs
Michael Fallon continues to lead a cross-government drive for less but better regulation, including through the 1-in, 2-out rule, which stipulates that Whitehall departments must offset any new regulatory requirements with savings to business worth at least double their cost.
The government is working with the business community and partners across Europe to reduce regulatory burdens stemming from the EU. In October 2013, a business-led taskforce on EU red tape commissioned by the Prime Minister issued a report setting out more than 30 EU rules, including on chemicals, waste disposal and employment regulations for small firms, which should be overhauled or abolished to promote growth.
The government is also on track to reduce costs to business of tax administration by £250 million by March 2015. Digital is transforming business tax services. VAT and corporation tax is online, as is registering the main types of taxes; and we are also modernising PAYE through digital real-time reporting. Working with private sector providers, we have developed record-keeping apps to help businesses keep an easy record of their expenditure; and we’re shortly rolling out our new digital tax account for businesses - a single account which brings into 1 place everything needed to deal with business tax affairs.
Notes to Editors
The list of the 3,000 reforms to be implemented will today be available at: http://www.redtapechallenge.cabinetoffice.gov.uk/home/index/ and visual illustrations of how the reforms will help businesses are at: http://www.flickr.com/photos/bisgovuk/12170644674/
The Red Tape Challenge invited the public, business and the voluntary and community sector to give their views, comments and ideas on what regulations should stay, be improved, or be scrapped altogether. The full results are at www.redtapechallenge.cabinetoffice.gov.uk/
In an announcement made on 10 September 2012, the government committed under RTC to identify, by the end of 2013, at least 3,000 regulations to scrap or improve.
Sectors covered by the RTC include: Agriculture; Aviation; Business Services; Challenger Businesses; Children’s Services; Civil Society; Company & Commercial Law; Employment Related Law; Energy; Environment; Equalities; General Aviation; Health and Safety; Healthy Living & Social Care; Hospitality, Food and Drink; Housing & Construction; Insolvency; Legal Services; Manufacturing; Maritime; Medicines; National Savings & Investments; Pensions; Planning Administration; Rail; Retail; Road Transportation; Sports & Recreation and Water & Marine.
The government estimates the total annual savings to business as a result of the Red Tape Challenge to be over £850 million per annum. At present, the Regulatory Policy Committee (RPC) has independently validated £383.69 million of this total annual saving; £300 million of which has already been implemented and is already starting to be realised by business. Based on departmental analysis, annual benefits to business of a further £500 million should be realised: these figures will be independently validated by the RPC.
In total, government action on red tape to date is already saving businesses £1.2 billion per annum through 1-In, 1-Out, now 1-In, 2-Out. The Red Tape Challenge has so far contributed £300 million towards this total with more to come. Through the Red Tape Challenge, departments have also identified at least a further £500 million estimated annual savings for business, including many significant reforms that do not score under 1-in, 2-out, such as rationalisations to guidance. This includes Defra’s rationalisation of guidance which is out of scope for 1-In, 2-Out but which Defra currently expects will save £1 billion over 10 years.
‘Improve’ or ‘reduce’ means that regulations are reduced in number (e.g. a consolidation, making the rules simpler to find and follow); and/or are reduced in terms of the burden they impose (for example: reducing who is caught by the regulation; removing domestic gold-plating of EU law; active renegotiation of EU law; simplifying requirements set by the regulation or in related guidance; or reducing the burden of inspection and enforcement arising from the regulation).
5,662 regulations have been examined across all Red Tape Challenge themes and of these, 3,095 regulations will be scrapped or improved. Of the 3,095, 1,042 are scraps to tidy the statute book, 100 are scraps with material benefit, 677 are improves to tidy the statute book and 1,276 are improves with material benefit. By scrap or improve ‘with material benefit’, we mean that the reform has an impact for business/ civil society, individuals or the taxpayer over and above tidying the statute book.
47 additional reforms are ‘not attached to any particular regulation’. These are reductions in the overall regulatory burden that were identified through the Red Tape Challenge process but are not linked to any single regulation, for example streamlining of thousands of pages of guidance and changes to regulatory processes, such as reduced burden in inspection regimes or improvements in electronic communications.
2,410 regulations will be kept following Red Tape Challenge scrutiny. Regulations that are being kept include a number that are already deregulatory in effect (eg exempting bodies from regulation). Other reasons for regulations to be kept include a strong policy rationale and requests from business or others to keep the regulation. There are 103 regulations for which decisions still to be finalised and 54 of the regulations were not in fact in force.
For more information on the Housing Standards Review consultation and impact assessment please visit: https://www.gov.uk/government/consultations/housing-standards-review-consultation
For more information about the business-led taskforce on EU red tape visit: www.gov.uk/government/news/government-welcomes-business-led-plan-to-cut-eu-red-tape.
The government’s Small Business Strategy, published in December 2013, announced a new business-led ownership model for the Focus on Enforcement programme, which seeks ways to enforce regulations more efficiently and effectively, and an improved appeals system for business to challenge decisions made by regulators. Visit: http://discuss.bis.gov.uk/focusonenforcement/
The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set 4 ambitions in the ‘Plan for Growth’, published at Budget 2011:
- to create the most competitive tax system in the G20
- to make the UK the best place in Europe to start, finance and grow a business
- to encourage investment and exports as a route to a more balanced economy
- to create a more educated workforce that is the most flexible in Europe
Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.