Press release

Hancock hails boost to economy as UK cuts EU red tape

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

A UK government campaign to cut EU red tape has saved businesses over £200 million in the first year.

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A UK government campaign to cut EU red tape has saved businesses over £200 million in the first year, Business Minister Matthew Hancock announced today (6 November 2014).

The findings were revealed in a new report by the EU Business Taskforce of 6 business leaders, which was first established by the Prime Minister last year (2013). One third of the taskforce’s recommendations have been delivered in the last year, saving UK businesses around £100 million a year, preventing additional costs of at least £100 million a year and banking one-off savings to firms of another £40 million.

But whilst acknowledging good progress has been made, Business Minister Matthew Hancock said:

It is imperative that the new European Commission goes further and moves much faster to boost business growth.

The 10 recommendations that have been delivered are as follows:

  1. The Commission agreed a non-binding recommendation rather than legislation in the shale gas sector, which could support more than 64,000 jobs in the UK alone. This will help safeguard annual investment worth up to £3.3 billion in the UK.
  2. A new EU framework for non-financial reporting has been limited to large listed and large public interest companies, avoiding unnecessary new burdens on small businesses.
  3. The Commission has withdrawn its proposed Soil Framework Directive which would have placed unnecessary burdens on farmers, builders and land managers without any additional environmental benefits and could have cost the UK economy up to £7.95 billion over 30 years.
  4. The Council agreed not to impose binding legislation on traineeships, allowing employers in the UK to continue to run tailored schemes with minimal bureaucracy to help get young people into work.
  5. The compromise reached on the Posting of Workers Enforcement Directive limits the amount of paperwork that businesses are required to provide.
  6. The EU’s new rules for Environmental Impact Assessments (EIAs) should reduce the number and length of assessments carried out, particularly for smaller projects, reducing costs for developers and small businesses.
  7. The EU agreed practical and proportionate rules on country of origin labelling for food – ensuring information for consumers, but without imposing significant and unnecessary costs on producers.
  8. A proposed amendment to the Waste Framework Directive would allow member states to exempt SMEs from registering as waste carriers when transporting low volumes of non-hazardous waste, benefitting up to 460,000 small businesses in the UK.
  9. The Commission has withdrawn its proposed Access to Justice in Environmental Matters Directive, which contained unnecessary, disproportionate and inflexible rules that would have been detrimental to business.
  10. The EU agreed a new streamlined regulation for clinical trials making it easier for business to apply and seek approval to undertake clinical trials. It is expected to save UK businesses some £60 million a year.

The government is confident that further reforms, potentially worth up to half a billion pounds to firms, will be implemented later this year (2014).

Business Minister Matthew Hancock said:

Our business taskforce has made lots of good progress in its first year and been a loud and clear voice for business within the EU. A new Commission is a fresh opportunity to push on this open door and cut the unnecessary EU red tape that suffocates too many businesses.

With around half of business regulation originating in Brussels, it is essential that the European Commission ups its game and reduces both the volume and cost of European legislation, creating jobs and a more competitive Europe.

We’ve had some great success at home with our Red Tape Challenge and changed the culture of government at home – but we have to finish the job in Europe.

More widely, the UK government has also been effective in blocking costly regulations such as proposals to impose more regulations on hairdressers and new rules on workplace ergonomics. Banning natural rubber latex gloves, enforcing protective clothing and non-slip shoes and imposing excessively tough recycling rules could have cost UK hairdressers alone £75 million a year. The Commission itself estimated its ergonomics proposal - which could have forced small shops to pay for eyesight testing for staff who use cash registers - could have cost EU businesses €3 billion a year.

This builds on the cross-government Red Tape Challenge and ‘One-in, Two-out’ initiatives, driven by Matthew Hancock, to cut domestic regulations that act as a brake on growth, and which are already saving UK firms more than £1.5 billion a year.

Sir Ian Cheshire, Group CEO of Kingfisher, and member of the Business Taskforce said:

As a European business, we believe a successful single market is vital to future prosperity and we will continue to support reforms that make the EU function better. The taskforce recommendations have already achieved some good results and it shows that Brussels is ready to listen and act on the concerns of business. The Commission has made a positive start in tackling red tape and focusing on growth-friendly policies.

FSB National Chairman John Allan said:

The taskforce has undertaken valuable work to highlight how poorly designed and disproportionate regulation hits small firms hardest. We are pleased by their early progress, particularly in getting the Commission to take up the cause of exempting small businesses from burdensome bureaucracy around waste disposal. However, there is clearly more to be done in Brussels to change the culture towards regulation, and we will continue working with the UK government to make the case for EU rules designed with small firms in mind.

The taskforce’s report Cut EU red tape - commissioned by Prime Minister David Cameron - set out 30 recommendations for reform of individual EU rules, specifically concerning removing barriers to overall business competitiveness; starting a company and employing people; expanding a business; trading across borders; and innovation.

Support is also growing for the COMPETE principles - strict rules proposed by the taskforce to ensure that all new EU proposals face tough tests so they do not hold back growth, job creation and innovation. Major European business organisations, the European Parliament and the Commission’s own Better Regulation Advisory Group have all publicly called on the new Commission to implement these principles.

Notes to Editors

  1. To see today’s report go to ‘Cut EU red tape: One Year on’
  2. Six business leaders were appointed to the taskforce on EU red tape by the Prime Minister in July 2013 as part of the government’s drive to cut bureaucracy and promote growth. They are: Marc Bolland, Chief Executive M&S; Sir Ian Cheshire, CEO Kingfisher; Glenn Cooper, Managing Director, ATG Access; Dame Louise Makin, CEO BTG; Dale Murray CBE, Entrepreneur and Angel Investor; Paul Walsh, Compass (formerly of Diageo).
  3. Their report Cut EU red tape was published on 15 October 2013. It is available at Cut EU red tape: report from the Business Taskforce.
  4. The UK is campaigning for swift implementation of the European Commission’s ‘REFIT’ programme, which promises to review, abolish or repeal a raft of red tape, including costly and unnecessary requirements on a wide range of businesses – from the smallest to the largest companies. Following the creation of a vice president for better regulation in the new Commission, ministers are calling on the Commission to take forward the COMPETE principles in order to put better regulation at the heart of EU policy making, and to make progress on further taskforce recommendations, by improving or getting rid of the regulations that get in the way of growth.
  5. Cut EU red tape called on the European Commission to adopt a new ‘common sense filter’ for all new proposals – the COMPETE Principles. The UK government agrees that no new EU legislation should be brought forward which does not successfully pass through this filter: Competitiveness test; One-in, One-out (costs of new regulations to be offset by equivalent reductions in burdens); Measure impacts; Proportionate rules; Exemptions and lighter regimes; Target for burden reduction; Evaluate and Enforce.
  6. In 2011 Britain introduced a radical ‘One-in, One-out’ rule requiring all Whitehall departments to offset all costs that new regulations are projected to impose on business by equivalent savings elsewhere. In January 2013 this was upgraded to ‘One-in, Two-out’. Italy, France, Spain, Portugal and Austria for example are now all implementing forms of One-in, One-out.
  7. Through initiatives like the Red Tape Challenge, which will save businesses £850 million per year by the end of the Parliament, the government is stripping back unnecessary domestic rules that restrict enterprise and act as a brake on jobs and growth. It has, for example, freed thousands of low risk businesses from unnecessary health & safety inspections, prevented responsible employers from being held liable for workplace accidents and injuries that are outside of their control, and introduced early conciliation for workplace disputes.
  8. The UK government has also put a stop to the practice of ‘gold plating’, ensuring that the government does not go beyond the minimum requirements of EU law when implementing EU directives, unless this is clearly in the UK interest.
Published 6 November 2014