Government red tape blitz to boost business growth
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Shops, offices, pubs and clubs will no longer face burdensome health and safety inspections, and over 3,000 regulations will be scrapped or …
Shops, offices, pubs and clubs will no longer face burdensome health and safety inspections, and over 3,000 regulations will be scrapped or overhauled in a radical plan by the Government to curb red tape and boost British business growth.
From April 2013, the Government intends to introduce binding new rules on both the Health & Safety Executive and on local authorities, that will exempt hundreds of thousands of businesses from burdensome, regular health & safety inspections.
In future, businesses will only face health and safety inspections if they are operating in higher risk areas such as construction, or if they have an incident or a track record of poor performance.
In addition, the Government will introduce legislation next month to ensure that businesses will only be held liable for civil damages in health and safety cases if they can be shown to have acted negligently. This will end the current situation where businesses can automatically be liable for damages even if they were not actually negligent.
The Government is also taking radical action on red tape in a further measure to boost growth and jobs in the economy. The Government is systematically examining some 6,500 substantive regulations that it inherited through the Red Tape Challenge process. The Government is now committing to abolish or substantially reduce at least 3,000 of these regulations and it will complete the identification of the regulations to be scrapped or overhauled by December 2013.
This commitment constitutes the most ambitious action ever proposed by a modern British government to slash the burden of regulation and set businesses free. It will save British companies millions of pounds in wasted time and money, and help spur economic growth and innovation across the UK.
The Red Tape Challenge has already resulted in a series of red tape cuts including a radical package of employment tribunal reforms, expected to deliver £40 million of savings per year to employers.
Business Secretary Vince Cable said:
“In these tough times, businesses need to focus all their energies on creating jobs and growth, not being tied up in unnecessary red tape. I’ve listened to those concerns and we’re determined to put common sense back into areas like health and safety, which will reduce costs and fear of burdensome inspections.”
Business Minister Michael Fallon said:
“Today’s announcement injects fresh impetus into our drive to cut red tape. We have identified the red tape and now we are going to cut it.
’ We’re getting out of the way by bringing common sense back to health and safety. We will now be holding departments’ feet to the fire to ensure all unnecessary red tape is cut.”
Alexander Ehmann, Head of Regulatory Policy at the Institute of Directors said:
“The Government’s efforts on deregulation are welcome. Today’s announcements are good news if they are the beginning, not the end of the deregulation story. Excessive regulation costs time and money, both of which businesses would rather spend on developing new products, hiring staff and building up British business both here and abroad. The IoD encourage Michael Fallon to turn up the heat on the removal of red tape and help to get Britain’s economy moving.”
On the inspection changes, Alexander Ehmann said:
“Removing the headache of health and safety inspections for low-risk businesses is a step change. Scrapping unnecessary and unpredictable inspections is a valuable piece of deregulation and the Government are to be congratulated for taking such bold and decisive action on behalf of Britain’s businesses.”
Stephen Radley, Director of Policy at EEF said:
“Burdensome health and safety rules are a drag on business. Cutting back on them is vital. We welcome the Government’s firm commitment to limit the liabilities of companies acting responsibly. It is now critical these reforms are delivered”.
Dr Adam Marshall, Director of Policy at the British Chambers of Commerce (BCC):
“Reducing the burden of health and safety red tape will be welcome news to many businesses, and is a win for common sense. The BCC has long argued for a risk-based approach to health and safety, with a less onerous regime for companies with low-risk workplaces.
These measures mean that law-abiding, low-risk businesses can live without the constant threat of time-consuming and costly inspections. It’s a sensible change whose time has come.”
**Notes to editors:
**1. The Government believes that economic growth in the UK has been held back by excessive regulation. Many of the regulations that can affect growth come from the EU - and that is why we are working with a group of like-minded governments in over half of the other EU countries to reduce the burden of European regulation, particularly for the smallest businesses. But much of the regulation that affects our growth prospects is home-grown. To reduce the burden imposed on business by such home-grown regulation, the Government has been:
a. Operating under a One-in-one-out rule (OIOO), which ensures that the cost imposed on businesses and social enterprises by any new domestic regulation is matched by deregulation with an equivalent saving for UK business. The One-In, One-Out rule is the first in the world of its kind, and ensures that when a new domestic regulation places a direct, identifiable burden on business (‘In’) a measure of equivalent value must be removed (‘Out’). It is a key mechanism designed to encourage regulation as the last resort, to be introduced only when all other policy alternatives have been exhausted. The application of the One-In, One-Out rule to new domestic regulation is reported in the Statement of New Regulation. The fourth Statement was published on 17 July 2012, and reported a cumulative reduction of business burdens since 2011 of over £850 million.
b. Running a Red Tape Challenge, which is systematically examining some 6,500 substantive regulations that we inherited with the aim of scrapping or significantly reducing as many of them as possible. The Red Tape Challenge was launched by the Prime Minister in April 2011. It gives business and the public the chance to have their say, by theme, on the regulations that affect their everyday lives. Results of Red Tape Challenge so far include:
i. A radical package of employment tribunal reforms, expected to deliver £40 million of savings per year to employers. The qualifying period for unfair dismissal has increased from one to two years.
ii. A portable Criminal Records Bureau check, which employers can view instantly online, will be available from Spring 2013.
iii. By October 2012, Government will have deregulated many live music performances and scrapped regulations dictating location and design of No Smoking signs.
iv. Planned reforms to environmental regulation to save business at least £1 billion over 5 years, while keeping important protections. Includes reducing burdensome bureaucracy with the 23.5m paper Waste Transfer Notes currently produced in the UK each year.
v. A significant reduction in the paper required to run a car, including scrapping the paper counterpart to driving licences in 2015, saving UK drivers up to £8 million.
vi. A commitment to get rid of unnecessary burdens in the Equality Act, in recognition that bureaucracy and prescription are not routes to equality. E.g. ensuring employers are no longer liable for the harassment of staff by a third party such as a customer.
vii. A comprehensive programme of consumer law reform, including a Consumer Bill of Rights, to scrap or improve some 12 pieces of overlapping and costly consumer legislation.
viii. DECC launched a consultation on 8 May 2012 on proposals to simplify the EU Emissions Trading System, to reduce the administrative burden of compliance, e.g. by replacing 13 sets of regulation with one. Revised regulations will take effect from January 2013.
Around 6,500 regulations are currently expected to undergo Red Tape Challenge scrutiny. At least 3,000 of these will be scrapped or reduced. By ‘scrapped’, we mean that regulation is completely removed from the statute book. By ‘reduced’, we mean that regulations are reduced in number (e.g. a consolidation, making the rules simpler to find and follow); and/or 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). Around 1,500 of the 3,000 changes will have a measurable financial benefit for business: this does not include consolidations of regulations without any changes to the content of those regulations. The Red Tape Challenge comprises regulation of UK origin and regulation that transposes EU laws. It does not include legislation or regulations falling within the responsibilities of the devolved administrations, tax and fees legislation or national security matters. The website is available at www.redtapechallenge.cabinetoffice.gov.uk.
The Red Tape Challenge is also flushing out instances of burdensome EU regulation as raised by business. Government is taking these concerns to Brussels and seeking opportunities to address these issues through for example, lighter regimes or micro exemptions. The Govt strongly welcomes the European Commission’s commitment in November last year to examine the stock of existing EU legislation to identify the scope for further exemptions and lighter regimes for micro-businesses.
As a result of Professor Lofstedt’s report and the Red Tape Challenge, Govt has already announced that it will: scrap or improve 85 per cent of health & safety regulations; make legal changes to help tackle the health & safety ‘compensation culture’ (e.g. on ‘no win, no fee’ cases); and free from health & safety law around 1 million self-employed people whose work poses no harm to others.
Building on this, Government will next month table legislation to remove the part of the Health and Safety at Work Act 1974 which imposes civil liability for breaches of statutory duty in relation to health and safety regulations. Subject to the will of Parliament, this so-called ‘strict liability principle’ will be removed for civil claims by the end of the Parliamentary session.
Currently, low-risk businesses face proactive health & safety inspection, such as visits, either by Local Authority or by HSE inspectors. From April 2013, there will be a new, binding, statutory Code under which HSE will direct all Local Authority inspections and this will rule out proactive inspections of low-risk businesses except where there has been a genuine employee complaint or real incident flagged to HSE. The HSE will also not inspect low risk businesses and will be bound by the same principles as in the Code for Local Authorities. Low risk businesses will include office based businesses, shops, hotels, restaurants leisure premises and pubs & clubs. Businesses in high risk areas such as mining, construction, explosives, gas fitting & installation, diving, agricultural activities, offshore activities, chemical industries and nuclear instillations will not be exempt from proactive enforcement.
There will be a consultation on the Code later this month.
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 four ambitions in the ‘Plan for Growth’ (PDF 1.7MB), 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.
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Notes to Editors
Name BIS Press Office Job Title
Division Department for Business, Innovation & Skills Phone
Name Aidan Steer Job Title
Division Department for Business, Innovation and Skills Phone 020 7215 5245 Fax
Published: 10 September 2012