The British Chambers of Commerce has published a report showing that the Coalition still has a long way to go to tame the state’s mania for excessive regulation.

Red Tape Challenged? reveals that 42% of new regulations are not covered by the Coalition’s One-In, One-out (OIOO) rule for regulations. This is because they concern tax or the environment or come from the European Union. Such a high figure – if it continues – will make a mockery of the Coalition’s aim to be the first administration to leave office having reduced the volume of regulation.

Equally disappointing, the study argues convincingly that the current volume of regulations is still  too high and that the process for passsing regulations is still flawed. The Government’s Statement of New Regulation, published in September 2011, showed that the net regulatory cost to businesses in the UK is £45 million for the October Common Commencement date. We are still strangling our wealth producers in red tape.

The situation is not totally bleak. There has been some progress with the introduction of the OIOO policy, the deregulatory measures on employment law and the Regulatory Policy Committee’s work.

Yet the problem is far from under control. The scrutiny of regulations is weak without a ‘guardian’ to ensure it is being delivered – the BCC argues this role should go to the Better Regulation Executive.  ‘One-in, One-out’ has potential to have a big effect, but the current exemptions and lack of transparency with Impact Assessments make it difficult to police. Brussels is still churning out proposed regulations especially over employment and health & safety.

In a timely warning, BCC Director General John Longworth writes “To be blunt, businesses the length and breadth of the country are yet to feel any concrete or positive change. Only substantive reductions in the regulatory burden will give companies confidence and enable them to plan for future growth with certainty and clarity.”


One Comment

  1. I dont see why ‘tax’ or the ‘environment’ should be exempt from the red tape challenge. My brother has a retail outfit and the VAT rules drive him insane. For instance did you know that VAT rate for vegetable crisps differs to the one for potato crisps. That he is charged a higher rate for charcoal than he has to pass on to the customer because it is classed as fuel. The logistics for putting a hamper together for sale at Christmas are a nightmare.