Government red tape blitz to boost business growth
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Issued 10 September 2012 - BIS
Hundreds of thousands of
businesses to be exempted from health and safety inspections
New legislation to protect business from ‘compensation culture’ claims
Over 3,000 regulations to be scrapped or overhauled
Shops, offices, pubs and
clubs will no longer face burdensome health and safety inspections, and
over 3,000 regulations will be scrapped or overhauled in a radical plan
by the Government to curb red tape and boost British business growth.
From April 2013, the Government intends to introduce binding new rules
on both the Health & Safety Executive and on local authorities,
that will exempt hundreds of thousands of businesses from burdensome,
regular health & safety inspections.
In future, businesses will only face health and safety inspections if
they are operating in higher risk areas such as construction, or if
they have an incident or a track record of poor performance.
In addition, the Government will introduce legislation next month to
ensure that businesses will only be held liable for civil damages in
health and safety cases if they can be shown to have acted negligently.
This will end the current situation where businesses can automatically
be liable for damages even if they were not actually negligent.
The Government is also taking radical action on red tape in a further
measure to boost growth and jobs in the economy. The Government is
systematically examining some 6,500 substantive regulations that it
inherited through the Red Tape Challenge process. The Government is now
committing to abolish or substantially reduce at least 3,000 of these
regulations and it will complete the identification of the regulations
to be scrapped or overhauled by December 2013.
This commitment constitutes the most ambitious action ever proposed by
a modern British government to slash the burden of regulation and set
businesses free. It will save British companies millions of pounds in
wasted time and money, and help spur economic growth and innovation
across the UK.
The Red Tape Challenge has already resulted in a series of red tape
cuts including a radical package of employment tribunal reforms,
expected to deliver £40 million of savings per year to employers.
Business Secretary Vince Cable said:
"In these tough times, businesses need to focus all their energies on
creating jobs and growth, not being tied up in unnecessary red tape.
I've listened to those concerns and we're determined to put common
sense back into areas like health and safety, which will reduce costs
and fear of burdensome inspections."
Business Minister Michael Fallon said:
“Today's announcement injects fresh impetus into our drive to cut red
tape. We have identified the red tape and now we are going to cut it.
' We're getting out of the way by bringing common sense back to health
and safety. We will now be holding departments’ feet to the fire to
ensure all unnecessary red tape is cut."
Alexander Ehmann, Head of Regulatory Policy at the Institute of
“The Government’s efforts on deregulation are welcome. Today’s
announcements are good news if they are the beginning, not the end of
the deregulation story. Excessive regulation costs time and money, both
of which businesses would rather spend on developing new products,
hiring staff and building up British business both here and abroad. The
IoD encourage Michael Fallon to turn up the heat on the removal of red
tape and help to get Britain’s economy moving.”
On the inspection changes, Alexander Ehmann said:
“Removing the headache of health and safety inspections for low-risk
businesses is a step change. Scrapping unnecessary and unpredictable
inspections is a valuable piece of deregulation and the Government are
to be congratulated for taking such bold and decisive action on behalf
of Britain’s businesses.”
Stephen Radley, Director of Policy at EEF said:
"Burdensome health and safety rules are a drag on business. Cutting
back on them is vital. We welcome the Government's firm commitment to
limit the liabilities of companies acting responsibly. It is now
critical these reforms are delivered".
Dr Adam Marshall, Director of Policy at the British Chambers of
"Reducing the burden of health and safety red tape will be welcome news
to many businesses, and is a win for common sense. The BCC has long
argued for a risk-based approach to health and safety, with a less
onerous regime for companies with low-risk workplaces.
These measures mean that law-abiding, low-risk businesses can live
without the constant threat of time-consuming and costly inspections.
It's a sensible change whose time has come."
1. The Government believes
that economic growth in the UK has been held back by excessive
regulation. Many of the regulations that can affect growth come from
the EU – and that is why we are working with a group of like-minded
governments in over half of the other EU countries to reduce the burden
of European regulation, particularly for the smallest businesses. But
much of the regulation that affects our growth prospects is home-grown.
To reduce the burden imposed on business by such home-grown regulation,
the Government has been:
a. Operating under a One-in-one-out rule (OIOO), which ensures that the
cost imposed on businesses and social enterprises by any new domestic
regulation is matched by deregulation with an equivalent saving for UK
business. The One-In, One-Out rule is the first in the world of its
kind, and ensures that when a new domestic regulation places a direct,
identifiable burden on business (‘In’) a measure of equivalent value
must be removed (‘Out’). It is a key mechanism designed to encourage
regulation as the last resort, to be introduced only when all other
policy alternatives have been exhausted. The application of the One-In,
One-Out rule to new domestic regulation is reported in the Statement of
New Regulation. The fourth Statement was published on 17 July 2012, and
reported a cumulative reduction of business burdens since 2011 of over
b. Running a
Red Tape Challenge, which is systematically examining some
6,500 substantive regulations that we inherited with the aim of
scrapping or significantly reducing as many of them as possible. The
Red Tape Challenge was launched by the Prime Minister in April 2011. It
gives business and the public the chance to have their say, by theme,
on the regulations that affect their everyday lives. Results of Red
Tape Challenge so far include:
i. A radical package of employment tribunal reforms, expected to
deliver £40 million of savings per year to employers. The qualifying
period for unfair dismissal has increased from one to two years.
ii. A portable Criminal Records Bureau check, which employers can view
instantly online, will be available from Spring 2013.
iii. By October 2012, Government will have deregulated many live music
performances and scrapped regulations dictating location and design of
No Smoking signs.
iv. Planned reforms to environmental regulation to save business at
least £1 billion over 5 years, while keeping important protections.
Includes reducing burdensome bureaucracy with the 23.5m paper Waste
Transfer Notes currently produced in the UK each year.
v. A significant reduction in the paper required to run a car,
including scrapping the paper counterpart to driving licences in 2015,
saving UK drivers up to £8 million.
vi. A commitment to get rid of unnecessary burdens in the Equality Act,
in recognition that bureaucracy and prescription are not routes to
equality. E.g. ensuring employers are no longer liable for the
harassment of staff by a third party such as a customer.
vii. A comprehensive programme of consumer law reform, including a
Consumer Bill of Rights, to scrap or improve some 12 pieces of
overlapping and costly consumer legislation.
viii. DECC launched a consultation on 8 May 2012 on proposals to
simplify the EU Emissions Trading System, to reduce the administrative
burden of compliance, e.g. by replacing 13 sets of regulation with one.
Revised regulations will take effect from January 2013.
2. Around 6,500 regulations are currently expected to undergo Red Tape
Challenge scrutiny. At least 3,000 of these will be scrapped or
reduced. By ‘scrapped’, we mean that regulation is completely removed
from the statute book. By ‘reduced’, we mean that regulations are
reduced in number (e.g. a consolidation, making the rules simpler to
find and follow); and/or in terms of the burden they impose (for
example: reducing who is caught by the regulation; removing domestic
gold-plating of EU law; active renegotiation of EU law; simplifying
requirements set by the regulation or in related guidance; or reducing
the burden of inspection and enforcement arising from the regulation).
Around 1,500 of the 3,000 changes will have a measurable financial
benefit for business: this does not include consolidations of
regulations without any changes to the content of those regulations.
The Red Tape Challenge comprises regulation of UK origin and regulation
that transposes EU laws. It does not include legislation or regulations
falling within the responsibilities of the devolved administrations,
tax and fees legislation or national security matters. The website is
available at www.redtapechallenge.cabinetoffice.gov.uk.
3. The Red Tape Challenge is also flushing out instances of burdensome
EU regulation as raised by business. Government is taking these
concerns to Brussels and seeking opportunities to address these issues
through for example, lighter regimes or micro exemptions. The Govt
strongly welcomes the European Commission's commitment in November last
year to examine the stock of existing EU legislation to identify the
scope for further exemptions and lighter regimes for micro-businesses.
5. As a result of Professor Lofstedt’s report and the Red Tape
Challenge, Govt has already announced that it will: scrap or improve 85
per cent of health & safety regulations; make legal changes to
help tackle the health & safety ‘compensation culture’ (e.g. on
‘no win, no fee’ cases); and free from health & safety law
around 1 million self-employed people whose work poses no harm to
6. Building on this, Government will next month table legislation to
remove the part of the Health and Safety at Work Act 1974 which imposes
civil liability for breaches of statutory duty in relation to health
and safety regulations. Subject to the will of Parliament, this
so-called ‘strict liability principle’ will be removed for civil claims
by the end of the Parliamentary session.
7. Currently, low-risk businesses face proactive health &
safety inspection, such as visits, either by Local Authority or by HSE
inspectors. From April 2013, there will be a new, binding, statutory
Code under which HSE will direct all Local Authority inspections and
this will rule out proactive inspections of low-risk businesses except
where there has been a genuine employee complaint or real incident
flagged to HSE. The HSE will also not inspect low risk businesses and
will be bound by the same principles as in the Code for Local
Authorities. Low risk businesses will include office based businesses,
shops, hotels, restaurants leisure premises and pubs & clubs.
Businesses in high risk areas such as mining, construction, explosives,
gas fitting & installation, diving, agricultural activities,
offshore activities, chemical industries and nuclear instillations will
not be exempt from proactive enforcement.
8. There will be a consultation on the Code later this month.
9. The Government's economic policy objective is to achieve 'strong,
sustainable and balanced growth that is more evenly shared across the
country and between industries.' It set four ambitions in the ‘Plan
for Growth’ (PDF 1.7MB), published at Budget
• To create the most competitive tax system in the G20
• To make the UK the best place in Europe to start, finance
and grow a business
• To encourage investment and exports as a route to a more
• To create a more educated workforce that is the most flexible in
Work is underway across Government to achieve these ambitions,
including progress on more than 250 measures as part of the Growth
Review. Developing an Industrial Strategy gives new impetus to this
work by providing businesses, investors and the public with more
clarity about the long-term direction in which the Government wants the
economy to travel.
About the Author
© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.
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Article Published/Sorted/Amended on Scopulus 2012-09-14 09:08:11 in Business Articles