Chancellor plans to cut regulation

Gordon Brown unveiled a set of initiatives to reduce business regulation yesterday in a clear attempt to head off mounting concerns over red tape.

The Chancellor said the Government would end several examples of "gold-plating" EU directives - where the UK goes further than required under regulations issued by Brussels.

He also unveiled plans to slim down regulation by local councils, bring forward plans to establish a better regulation office and for the penalty regime to be focused on rogue companies.

He also said a host of reviews to be published next week as part of the pre-Budget report would deliver massive improvements to transport, planning skills, innovation and intellectual property.

He announced the moves at the annual conference of the CBI, which last week showed a fifth of UK companies had moved some operations abroad to escape red tape. He told business leaders: "The risk-based approach that Britain is now pioneering is founded on a different view of the world - adopting a risk basis with only a fraction of forms, a fraction of information requirements and a fraction of inspections needed."

Mr Brown endorsed the findings of a year-long review into gold-plating and regulatory "creep" carried out by Lord Davidson of Glen Clova. The report highlighted 10 areas where the UK took a more aggressive attitude towards regulation than had been proscribed by Brussels. In one case, he found that British motorists could save £465m a year by cutting the frequency of MoT tests to European levels. The MoT imposes an annual roadworthiness test on cars that are three or more years old. The minimum EU requirement is for a test every other year on cars that are four or more years old.

The Chancellor also endorsed a review of regulatory penalties undertaken by Professor Richard Macrory that calls for resources to be targeted towards frequent offenders while firms with a history of compliance will receive fewer inspections.

The Treasury announced it would extend to 70 council areas pilot schemes in Bexley, south London, and Warwickshire that had cut shop inspections by a third.

It said it would legislate to create the Local Better Regulation Office to oversee reducing the red tape on business next year rather than 2009, although it said it would depend on finding Parliamentary time.

Business groups gave the moves a tentative welcome. Richard Lambert, the director general of the CBI, said: "The Chancellor's efforts to maintain momentum towards creating a better regulatory environment for business are very welcome. Business will be keen to ensure they are delivered swiftly and effectively."

Miles Templeman, director general at the IoD, said: "Our continual dialogue with Whitehall departments has shown that while a cultural change is slowly emerging, some elements of the Civil Service continue to lag far behind the Chancellor's sentiments on regulation."