Ian Lucas: Better regulation helps, not hinders, the business community
Oct 20 2009 Agenda, Birmingham Post
Ian Lucas, Minister for Business and Regulatory Reform at the Department for Business, Innovation and Skills, on the importance of engaging with the business community.
The idea of government “red tape” tying businesses up in knots is all too familiar. It is a consistent complaint from businesses and a popular image in the media. But it is one which is far from fair.
The World Bank, in its recent report on the Ease of Doing Business, ranked the UK’s business environment as the best in Europe and the fifth best in the world. It is our aim to improve the UK’s business environment even further, not just to help companies out of the economic downturn, but to ensure they are best placed for the economic upturn when it comes.
Regulation is often is seen as a barrier, taking valuable time and money away from the important work of running and growing a business. But good regulation is good business practice. It provides essential protections and delivers a wide range of benefits to businesses and a society in general, from the safety of the food we eat to the quality of the environment we live in. And it can stimulate and support economic growth, for example by supporting common standards for products, which help lower transaction costs and build trust, contributing around £5 billion a year to the UK economy. And it helps improve living standards and reduce inequality, as the million or so people who benefit from the National Minimum Wage would agree.
But we know that the complaint of the amount and cost of new rules imposed on businesses is a very real concern, especially for small businesses and in the current economic climate. That is why we have been working hard to drive down the costs, delivering more than £2 billion in annual savings to businesses so far. We are on track to cut the overall administrative costs of regulation by a quarter; that will save £3.4 billion a year by the middle of next year.
The Government is committed to improving the way it regulates; producing well thought-out, effective new rules, where the benefits outweigh the costs. The Better Regulation Executive, at the Department for Business, leads this work with the aim of making life as simple as possible for businesses. It works with the rest of government to challenge, improve and even cut new and existing business laws.
But working with government is only part of the Better Regulation Executive’s story. To get a real understanding of how regulation impacts on businesses, the best way is to talk to business directly, to listen to what irritates them and get their ideas for changing things. This is why they are visiting the West Midlands, meeting with local businesses to get a better understanding of the issues affecting them and showing how the Better Regulation Executive can help.
And listening to businesses and getting their feedback has already paid dividends. The dispute resolution process, which was updated a few years ago to make it more efficient and straightforward by a three-step procedure, is a good example. Businesses started telling us that it was making things more complicated and driving more minor employer-employee disputes to the tribunal stage. So the process was reviewed and, after consulting with the business community and others, a revised system was put in place in April this year. It is making things simpler for businesses, saving them an estimated £175 million a year.
The Better Regulation Executive actively encourages businesses to give them their ideas of how to change things, not just through its regional visits but also through its website at www.betterregulation.gov.uk
It has a facility to ensure any suggestion you have gets to the right person in government who will respond within 90 days. With more than 1,000 suggestions over the last two years, about a third have either been taken forward as new ideas or are already being implemented or considered by government.
Getting the attention of businesses, to generate and capture their ideas, is absolutely vital. The Better Regulation Executive works closely with the National Business Awards to reach as many businesses as possible. It is paying dividends with a number of nominations from the private sector for the Better Regulation Award this year. This shows how better regulation has not only embedded itself across government but is having a positive impact on businesses, too. They are not just feeling the benefits of better regulation, but working in partnership with the public sector to deliver it.
One of the shortlisted companies, a practice of independent consultants, is a good example of this. Responding to the growing issue of firms seeking good quality advice on fire safety, they have bridged a gap of uncertainty by providing new guidance aimed at helping companies produce a simple, qualitative risk assessment themselves. It has become a straightforward way for companies to save time and money and take the right approach to fire safety.
And the better regulation agenda has taken a significant step forward recently. The Business Secretary, Lord Mandelson, announced a new package of measures that will have a far reaching effect on the way government and the business community work together.
Building the best framework for business to succeed is at the heart of better regulation. We have set a new and challenging target to drive down the costs of regulation by a further £6.5 billion by 2015. And we also addressed more immediate concerns by ensuring that no regulations are introduced earlier than is absolutely necessary in the current economic climate. To give real help to businesses now, we have considered the timing of the introduction of nearly 30 new laws, postponing around £3.5 billion in costs to business until after April 2011. And to increase transparency and accountability, giving businesses more information to plan and prepare, we have published for the first time a detailed timetable of all the Government’s new planned rules that will come into effect between now and April, 2011.
Listening to businesses, getting their ideas, along with this ground-breaking package of measures, will help us work towards dispelling the compelling idea of “red tape” and help us make life simpler for everyone.
* The Better Regulation Executive is holding a series of events in the West Midlands.
