Business Law & Compliance

Red tape costs cut by nearly £1bn

3 min read

19 December 2012

Whitehall seems to be rolling back some barriers to business growth, new figures reveal.

Businesses will benefit from nearly £1bn in reduced red tape costs thanks to government action, independent figures revealed.

The Fifth Statement of New Regulation reports that the overall closing balance for “one-in, one-out” is predicted to be around £836m since January 2011. Additionally, the government expects to abridge the regulatory burden by a further £83m. This will happen between January 2013 – when “one-in, one-out” is replaced by “one-in, two-out” – and June 2013. Expected measures include reforms to environmental regulation, employment law and consumer law. 

According to business minister Michael Fallon, Whitehall is increasingly putting the needs of businesses centre stage, but vowed to go further and faster to roll back barriers to growth.

All departments predict either a zero balance or being in credit at the start of “one-in, two-out”. This shows that the deregulatory agenda is having an impact right across Whitehall.

The report indicates that the overwhelming majority of government measures affecting business are deregulatory. Only ten new items imposed new costs on business, compared with 89 that will save money or impose a zero net cost. The costs from the “ins” (£6m) dwarfed the savings from the “outs” (£89m). A net saving to business of £83m is predicted.

Recent deregulatory measures include: 

  • Modernisation and simplification of the registration of company charges, saving £21.9m;
  • A series of changes to building regulations to reduce cost and complexity for industry;
  • Less heavy-handed Health and Safety regulations for low-risk businesses, including shops and offices; and
  • Improvements to speed up processes covering adoption and foster-carer eligibility.

“The government has a very simple objective: to make the UK the best place in Europe to start, finance and grow a business. This requires a fundamental culture change in Whitehall, so that new regulation is only imposed as a last resort. We’ve made a promising start, but firms still struggle with excessive red tape. We’ll now push departments to go further to bear down on costs imposed on business, and we’ll fight harder to get EU bureaucracy off the back of our entrepreneurs.” Fallon said.

For the first time, this statement sets out EU measures that will be introduced during the reporting period. Businesses will be given time to prepare for these changes. Some 57 EU measures are expected to be implemented into UK legislation.