The government this week claimed to have saved employers £3bn by reducing red tape.
“During 2011 we have made real progress in cutting the costs of red tape for businesses, claimed business minister Mark Prisk after publishing the government's latest statement on regulation this week. Deregulatory measures increased three-fold between the first and second halves of 2011, the report claimed, with 60% of government departments reporting a net reduction of regulatory costs to business. The value to business of the reduced administrative burden was £3bn, the paper estimated.
“As well as the £3bn saving for employers from the new indexation of pensions, we have seen a capping of other regulatory costs, and a substantial rise in the numbers of deregulatory measures. This is an encouraging sign that the culture in Whitehall is beginning to change. People are beginning to realise that regulation must be the last resort, not the first option. There is much more to do - especially so that businesses really notice the difference - but this first year is very promising," the minister said.
The report forms part of the Red Tape Challenge (RTC), a campaign launched by the government to help free-up businesses from excessive regulations. There are more than 21,000 regulations currently active in the UK. Under the challenge, each government department will have to document the regulations it intends to eliminate before December 2011. Those departments failing to reduce costs have committed to do so by the next statement, the date of which is yet to be confirmed.
Examples of simplifications so far include: an online mechanism to inspect patents; self-certification of building work to reduce the need for local authority inspections; plus controversial proposals to reduce statutory filing requirements for very small companies.
However, the RTC will not address regulations regarding tax or national security - this is the remit of the Office of Tax Simplification, which is pushing for the removal of 36 tax reliefs as well as a wider review of small business tax.
Diana Bruce, senior policy liaison officer for the Chartered Institute of Payroll Professionals commented that although there are many other areas in which tax is yet to be scrutinised, this initiative shows a promising start from the government.h the tax breaks. It is important individuals understand all the risks and complexities of the scheme before making any investment."