Doubts over effectiveness of government pledge to cut red tape for business

Eyebrows are raised over an increase in the number of new laws introduced by the government.

Eyebrows are raised over an increase in the number of new laws introduced by the government.

The number of new laws introduced by the government rose for the first time in three years in 2012, suggesting that David Cameron’s red-tape cutting agenda may have slowed.

According to research by legal information provider Sweet & Maxwell,1,466 new laws were introduced over the last year, compared with the 1,355 introduced in 2011, representing an 8 per cent increase.

‘This is a worrying indicator that part of the government’s aim to reduce red tape for businesses by lowering the number of new laws has taken a temporary hit and may be running into difficulties,’ says Daniel Greenberg, author of Laying Down the Law, which explores how legislation is put together.

‘Although the ultimate aim of a lot of these reforms is to lighten the regulatory load for businesses, there is still a huge amount of change for them to digest at a time when they are battling a tough economic climate.’

Greenberg says that legislation such as the Localism Act, which is aimed at speeding up planning processes, actually has resulted in a wave of new regulations and procedures for businesses to absorb.

‘This shows that even with the best intentions to avoid red tape, the immediate impact of any major reform agenda is almost invariably a headache for businesses as they grapple with the new ways of doing things,’ he adds.

The government recently pledged to cut the burden on businesses by stepping up its ‘One-In, One-Out’ policy on the introduction of new regulations to a ‘One-in, Two-Out’ rule.

This means that from this year the government is committed to ensuring that any increase in the cost of regulation must be at least matched by finding double the savings by reducing the regulatory burden for businesses elsewhere.

The government has also introduced the ‘Red Tape Challenge’, to promote discussion on which regulations ought to be removed.

Greenberg adds, ‘It will be interesting to see whether the ‘One-in, Two-out’ rule and other initiatives will have much impact and significantly reduce the volume of red tape with which small businesses have to battle.’

In response to this article, business and energy minister Michael Fallon has issued the statement, ‘The UK government is doing more than any other to get red tape out of the way of hard working businesses, and it would be wrong to say that we are increasing the costs to business.

‘Since 2010, the government has cut costs to business by nearly £1 billion, a figure verified by the independent Regulatory Policy Committee. But we’re going further and faster, replacing our one in, one out rule with a one in, two out rule.

‘Bureaucracy stifles enterprise and the UK government is determined to do all it can to free businesses to create jobs.’

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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