Red tape announcements should only be the first step to scaling back burdensome regulations

July 29, 2011 5:05 PM

Retailers, as well as the wider rational population, breathed a small sigh of relief on Thursday when Business Secretary Vince Cable announced that the Government will slash the burden of bureaucracy by removing over half the existing regulations faced by the industry as part of the ongoing 'Red Tape Challenge'. These long overdue reforms will consign 130 ineffective and needless restrictions to the scrapheap. The move has been welcomed as a step towards a freer, friendlier and hopefully more profitable retail sector.

Regulation has always been a drain on business time and resources, but it’s especially absurd when the Government enforce costly restrictions that yield little or no benefit to employees, customers or the environment. This was evident in the law requiring shops selling chocolate liqueurs to have a full alcohol licence, or the time-wasting rules of safe pencil use. It’s common sense to scale back on laws like this, and get rid of redundant ones that no longer apply. It will also boost short term confidence for smaller retailers in particular.

[caption id="attachment_39481" align="alignright" width="225" caption="They can sell chocolate liqueurs to whoever they like now"][/caption]

The move should only be the start of tackling the major burdens on business, and a great deal of work remains to be done. Regulation will still be excessive and burdensome after yesterday’s announcement is made reality. Opportunities for job creation continue to be missed, and consumers continue to be short changed. In truth, this announcement merely skirted the edges of the obstacles in the way of small businesses. Cutting entrenched bureaucracy is easier said than done; it has been promised before and was promised by both parties in the Coalition's Programme for Government, but efforts must be stepped up so that actions speak louder than rhetoric.

If anything, new regulations lingering like dark clouds on the horizon will make things tougher, worsened by incoming directives from Brussels. For example, the forthcoming EU Directive on agency staff will have a devastating impact on the ability of firms to make sensible business decisions. This measure has been estimated to single-handedly add £40 billion to the costs to British businesses in the next 10 years, putting yesterday’s announcement chillingly into perspective.

As business leaders acknowledge, the time for positive gestures has passed. Now is the time to deal with the major barriers that stand between the incentives of the market and the ability of firms to respond. Additions to the bureaucratic mountain must be resisted. Yesterday’s announcements are welcome but must be the first move of a much more drastic scaling back of regulations. As Matthew Sinclair pointed out on Monday, excessive regulations hit small firms particularly hard and if we want them to grow, create jobs and wealth, and help boost that much-discussed 0.2 per cent growth figure, then the Government must get off their backs and let them get on with it.Retailers, as well as the wider rational population, breathed a small sigh of relief on Thursday when Business Secretary Vince Cable announced that the Government will slash the burden of bureaucracy by removing over half the existing regulations faced by the industry as part of the ongoing 'Red Tape Challenge'. These long overdue reforms will consign 130 ineffective and needless restrictions to the scrapheap. The move has been welcomed as a step towards a freer, friendlier and hopefully more profitable retail sector.

Regulation has always been a drain on business time and resources, but it’s especially absurd when the Government enforce costly restrictions that yield little or no benefit to employees, customers or the environment. This was evident in the law requiring shops selling chocolate liqueurs to have a full alcohol licence, or the time-wasting rules of safe pencil use. It’s common sense to scale back on laws like this, and get rid of redundant ones that no longer apply. It will also boost short term confidence for smaller retailers in particular.

[caption id="attachment_39481" align="alignright" width="225" caption="They can sell chocolate liqueurs to whoever they like now"][/caption]

The move should only be the start of tackling the major burdens on business, and a great deal of work remains to be done. Regulation will still be excessive and burdensome after yesterday’s announcement is made reality. Opportunities for job creation continue to be missed, and consumers continue to be short changed. In truth, this announcement merely skirted the edges of the obstacles in the way of small businesses. Cutting entrenched bureaucracy is easier said than done; it has been promised before and was promised by both parties in the Coalition's Programme for Government, but efforts must be stepped up so that actions speak louder than rhetoric.

If anything, new regulations lingering like dark clouds on the horizon will make things tougher, worsened by incoming directives from Brussels. For example, the forthcoming EU Directive on agency staff will have a devastating impact on the ability of firms to make sensible business decisions. This measure has been estimated to single-handedly add £40 billion to the costs to British businesses in the next 10 years, putting yesterday’s announcement chillingly into perspective.

As business leaders acknowledge, the time for positive gestures has passed. Now is the time to deal with the major barriers that stand between the incentives of the market and the ability of firms to respond. Additions to the bureaucratic mountain must be resisted. Yesterday’s announcements are welcome but must be the first move of a much more drastic scaling back of regulations. As Matthew Sinclair pointed out on Monday, excessive regulations hit small firms particularly hard and if we want them to grow, create jobs and wealth, and help boost that much-discussed 0.2 per cent growth figure, then the Government must get off their backs and let them get on with it.

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