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Company secretary struggles with a pile of paperwork

New government initiative to cut the paperwork pile

Business Secretary Vince Cable announces red tape action plan

WELCOME NEWS today (03 June) for all business van operators and traders weighed under by government red tape – Business Secretary Vince Cable has announced an action plan to bring an end to the excessive regulation that is stifling business growth.

He detailed the first phase of the Coalition Government’s action plan to reduce regulation following the Prime Minister’s commitment last week to ‘re-open Britain for business’.

The action plan consists of the following:

A new Cabinet ‘Star Chamber’ that will lead the government’s drive to reduce regulation which is stifling growth, especially of small businesses. This Reducing Regulation Committee will be chaired by the Business Secretary and will enforce a new approach to new laws and regulations, ensuring that their costs are being properly addressed across the entire British economy.

An immediate review of all regulation in the pipeline inherited from the last government. The cost of implementing this amounts to £5bn annually before April 2011 and £19.1bn per annum thereafter. This will be the first action for the new Cabinet committee.

Establishing a new ‘challenge group’ to come up with innovative approaches to achieving social and environmental goals in a non-regulatory way. This team would work with experts including Richard Thaler, the US behavioural economist.

A new approach to control and reduce the burden of regulation. A ‘one-in, one-out’ approach, designed to change the culture of government, would make sure that new regulatory burdens on business are only brought in when reductions can be made to existing regulation.

Business Secretary Vince Cable commented: “The deluge of new regulations has been choking off enterprise for too long. We must move away from the view that the only way to solve problems is to regulate.

“The government has wide-ranging social and ecological goals including protecting consumers and protecting the environment. This requires increased social responsibility on the part of businesses and individuals.

“This is a real challenge and it will not be easy. We need to reduce regulation and at the same time meet our social and environmental ambitions. This demands a radical change in culture away from the tick box approach to regulation only as a last resort. It’s a big task but one worth striving for.”

The Federation of Small Businesses (FSB) welcomed the move for the UK’s 4.8 million small firms.

The FSB said its research showed that a third of small businesses wanted to expand but said excessive regulation made it difficult.

“Small firms have repeatedly said that the burden of regulation and the time it takes to comply with is just too much and could prevent them from taking on staff – and stunts economic growth,” said the FSB’s policy chairman, Mike Cherry.

“We now need to see the government give detailed plans as to how these will take effect so that small firms can get on with growing their business, rather than spending precious time filling in forms to say they will do just that,” he added.

Further information

There is additional commentary on the issue of excessive regulation in the Editor’s Blog on our sister Business Car Manager site: Strangled by red tape.

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