An end to excessive regulation?

The government has taken its first steps to reducing the amount of red tape which is stifling business, particularly SMEs.

The Business Secretary, Vince Cable, has announced an action plan to tackle excessive regulation. It includes the following:

• The creation of a new Cabinet “Star Chamber”, officially to be called the Reducing Regulation Committee, which will be chaired by Mr Cable. It is tasked with “stress-testing” proposed regulations to make sure that only those that are of suitable high quality (i.e. meet good regulation principles) and are of suitable high priority get through.
  
• An immediate review by the new committee of all regulation in the pipeline introduced by the last government. In March 2010, the Better Regulation Executive identified some 200 new proposed regulations to be brought in during the year to April 2011 at a cost of £5 billion, and regulation beyond that in the pipeline costing about £19 billion.
  
• Establishing a new “Challenge Group” to come up with innovative ways to achieve social and environmental goals in a non-regulatory way. This group will work with experts, including Richard Thaler, the US behavioural economist.
  
• Introducing the “one in one out” approach to regulation whereby new regulation can only be introduced if old regulation is removed. The idea is that the total cost to business of new regulation must be less than that of old regulation.

Mr Cable said, “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.”

Well said, Mr Cable, I totally support this new approach. Let’s hope that this leads to the choking of SMEs by excessive red tape coming to an end and businesses being able to breathe freely again.

Gary Cousins
Business Solicitor