POLITICS
28/07/2011 02:16 BST | Updated 26/09/2011 06:12 BST

Red Tape To Be Cut By Government, Business Gives Cautious Welcome

Business groups have given a cautious welcome to plans by the government to cut bureaucracy across the retail industry. But small business groups believe much more is needed if the flagging economy is going to pick up any time soon. They also believe the government is cutting red tape in some areas while introducing yet more of it in others.

The business secretary Vince Cable has responded to a three month-long consultation called 'The Red Tape Challenge', pledging to scrap outdated and overlapping laws which often waste time and money for retailers. He promised that dozens of regulations - ranging from the sale of poisons to some baffling laws about the sale of Christmas crackers - would be abolished.

However the government is unclear on how much money this would save retailers overall, or how the changes affect economic growth. Cable noted that shops currently needed an alcohol license to sell liqueur chocolates, something he described as 'ridiculous'. However he said the economic value of scrapping some of these arcane and obscure regulations was "difficult to quantify."

Some of the regulations being scrapped can be removed without new laws but others will require legislation to abolish them. A Business Bill is expected to be introduced in the current Parliamentary session, which is due to end next spring. Vince Cable said any red-tape cutting measures would be included in that Bill.

The former director-general of the British Retail Consortium, Kevin Hawkins, worked with the government on producing the list of regulations to be scrapped. He welcomed the decisions, but warned that there was still a corner to be turned in terms of stopping new regulations being introduced. "If there isn't the political will to stem regulation then this work will be hampered," he said. "The buck stops in Whitehall, Brussels and Strasbourg."

The British Retail Consortium welcomed the changes, but warned they could be cancelled out by measures being undertaken by other government departments. A spokesman said: "We question how these incremental changes will deliver real change on the ground at a time when the government is introducing more big ticket regulation, for example around parental leave and flexible working. If we’re to see real economic growth in the UK, deregulation can’t be derailed by new and costly laws.”

The Chairman of the Federation of Small Businesses, John Walker, said: "Plans to bring about a ‘culture change’ in the regulatory environment are all very well but will not inject confidence into the economy now – and certainly won’t help when the really burdensome regulation comes in over the next few years.”