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Spotlight on the Red Tape Challenge

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22nd Sep 2011
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In April 2010, the Prime Minister said: "I want us to be the first government in modern history to leave office having reduced the overall burden of regulation, rather than increasing it," explains Diana Bruce. 

They may well leave office having reduced regulation but they may also leave office having driven employers and businesses to distraction with all the reviews, consultations and changes taking place.  However leaving cynicism aside, the government published a document called Reducing Regulation Made Simple (surprisingly only 20 pages long). It sets out how the coalition agreement commitments will be implemented and how, over the course of this parliament, they will reduce the quantity and improve the quality of domestic regulation and regulation that comes from the EU. 

The Better Regulation Executive has been instrumental in putting the coalition's strategy on reducing regulation, in place. The policies include initiatives such as the ‘One-in, One-out’ rule, micro-business exemption and the Red Tape Challenge (RTC).

The RTC campaign is part of the government’s Plan for Growth (a lengthier read at 131 pages) and its aim is to tackle the stock of existing regulations, to help free-up businesses, encourage greater personal responsibility and create jobs. The RTC website was launched in April this year and it calls on everyone, whether consumer or business to get involved and speak out about the regulations they feel are unnecessary and burdensome in the UK. The site has been designed to promote open discussion and to use the valuable experience and ideas of those very people who deal with regulation on a daily basis. So far there have been 23,575 comments posted on the site and in a recent announcement by government and as a direct result of the RTC, there are plans to scrap or simplify more than 160 regulations – more on this later!

With more than 21,000 regulations currently active in the UK, the website publishes various regulations affecting one specific sector or industry every few weeks, dubbed as ‘spotlights’ and focuses on regulations that are known to place the biggest burdens on businesses and society. Some of the previous spotlights have been on manufacturing, health and safety, and retail. Currently the live areas for comment are environment and general regulations, with employment related law coming up on the agenda in the near future. When each spotlight five week window has closed, the public’s contributions will be used by government as part of producing a set of proposals on regulatory reform where they will have three months to work out which regulations to keep and why. Importantly, the default presumption will be that burdensome regulations will go. If ministers want to keep them, they have to make a very good case for them to stay. There are six cross-cutting themes that are open for comment throughout the whole RTC process, although each has or will have a window in the spotlight. These are equalities, health and safety, environment, employment related law, company and commercial law (includes accounts and returns) and pensions and even though submissions may be received after a spotlight has closed, they will still be considered by relevant departments, as part of the government’s longer term commitment to regulatory reform.

The UK is also affected by EU regulations; however the UK government cannot scrap EU regulations, but they do recognise the burden they impose so they are also giving the public an opportunity to comment on how EU legislation has been implemented in the UK on the RTC website. They will then review areas where the UK has gone beyond the minimum required by the EU legislation. The government is also working with other EU member states to try to make sure new burdens placed on business are off-set by savings elsewhere and are pushing the European Commission to start by publishing the cost of planned regulations and setting a target to reduce the overall burden of EU regulation. They are also working to try and ensure that the European Commission strengthens the small and medium enterprise test so that businesses of fewer than 10 employees are exempted from new European legislation.

While it is easy to be skeptical, the fact that the government has made such big changes to the culture of government and are openly seeking opinions from those affected directly by the mass of regulation can only be a positive move. For each sector theme, there is an experienced ‘sector champion’ who will provide expert knowledge on the issues faced by those on the ‘shop floor’ as it were. The champion acts as an intermediary between the sector and government and helps to direct the website debates and discussions. For example the retail sector champion is Dr Kevin Hawkins OBE, who is a former director general of the British Retail Consortium and director of Communications for Safeway Stores. He is an economist who has written books on unemployment and industrial relations and has been a member of the Cabinet Office Better Regulation Task Force/Better Regulation Commission. So the government has obviously made very suitable appointments when deciding on who should be the sector champions.

The RTC is undoubtedly working as plans to scrap or simplify more than 160 regulations were announced last month. The retail theme opened on 7 April 2011 and almost 9,000 comments were made accompanied by written submissions from a variety of business groups. The proposals are the first results from the RTC and will see significant changes to legislation that will make life easier for businesses in the retail sector and will promote personal freedoms. A spreadsheet has been produced which shows which regulations will be affected. The plans remove more than half the 257 pieces of retail legislation under consideration and simplifies or improves at least 34 of the remainder. 

It is quite incredible the number of seemingly insignificant regulations that have come into force over the years. Did you know that if a shop sells liqueur chocolates they have to have an alcohol licence? This is going to be scrapped, as will the rules around the safety of pencils. And did you know there is an age limit for buying harmless Christmas crackers? The age limit is going to be reduced.  Highlighting the rather obscure rules may seem laughable but these are the types of outdated legislation that businesses have to adhere to. These moves will help reduce costs especially for small retailers by cutting down the number of forms they have to fill in and overlapping and confusing laws they have to get to grips with. One comment was published on the RTC website about the TV licensing act which requires retailers to notify the TV Licensing Authority whenever a TV, DVD, video recorder, digital box or PC with TV card is sold within 28 days of every sale and provide full details of the customer. The act was introduced in 1967 but with the modern communication methods we have it means that such steps are now redundant and the law should be repealed. As a result the plan is to remove the requirement on retailers.

The RTC will not examine regulations in relation to tax or national security as separate arrangements are in place to simplify the tax system, led by the Office of Tax Simplification. As listed previously there are many other areas to be scrutinised over the two year duration of this campaign and further public consultation on changes to legislation will be required before proposals can be implemented but this has certainly been a promising start.

Diana Bruce is a senior policy liaison officer for the Chartered Institute of Payroll Professionals (CIPP).

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By RedTapeDoc
29th Sep 2011 15:33

Will the better regulation executive get it right

I’m all for ensuring that regulations are fair and effective, but regulations are needed to protect people. We know that unnecessary rules and regulations are a real concern for the business owners but there is an important balance to strike. Let’s hope the The Better Regulation Executive get it right!  

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