The trade body for British industries has urged the government to get a grip on business red tape, which threatens to strangle the UK's economic growth.
In its new report 'Changing the rules – eight steps to a better regulatory regime', the Confederation for British Industries said urgent action is needed to tackle what it called an "ingrained culture where there is too little detailed thinking about the real impact of regulation on business".
The net added cost of regulation on UK businesses will increase by £177.7 million as a result of policies created in 2011 alone, when for every £3 of costs removed, another £5 was added, according to the report.
Katja Hall, the CBI's chief policy adviser, said in a statement that while the Autumn Statement from chancellor George Osborne contained some "really welcome" proposals, small and medium sized businesses were still "drowning under the weight of extra regulation, layered on top of outdated red tape which has not been repealed".
“We're calling on the government to back up its words with action. We want to toughen up the law so there is a presumption that every piece of regulation has a sunset clause, so it expires after a set date unless it is actively renewed," she continued.
“We want the regulation minister to personally sign off each extra piece of regulation and business laws to be subject to greater scrutiny in Parliament. We want a culture shift in Whitehall, with greater transparency and accountability in how regulation is created, and more detailed analysis of what it will mean for businesses, with civil servants bringing in external expertise to fully inform thorough impact assessments.”
Eight recommendations are suggested by the report, they are:
- The Regulatory Policy Committee should be made truly independent
- A presumption in favour of sunset clauses
- Improving Impact Assessments
- Economic regulators should be made more accountable to their sectors and the wider economy
- Parliament should be tasked to interrogate regulations
- Embedding the Red Tape Challenge into government practice
- The government should deliver a clear regulatory lifecycle
- The civil service should more often commission and curate – not create – policy options
Hall also said greater independence should be given to the Regulatory Policy Committee to prevent wrangles with civil servants over whether a regulation was an "in" or an "out", and that the list of duties and obligations of economic regulators needed to be shrunk and refocussed on promoting competition, consumer interests and growth.
"Parliament must take more responsibility for regulation, and should play a far greater role in holding the government to account. At present there is little scrutiny of departments' efforts to reduce regulations and the overall success of the government's agenda," Hall continued.
"The Regulatory Reform Select Committee should be a thorn in the side of ministers, holding them and senior civil servants to account on an annual basis for their department's performance."
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