Chambers of Commerce blasts ministers on regulation

The Government claimed today to have made "real progress" in cutting red tape despite a business group saying that ministers have failed to stem the flow of new regulation.

The Business Department said the costs of business regulations had been capped during 2011, with a gross reduction of over £3 billion.

But the British Chambers of Commerce (BCC) said £45 million in new costs had been imposed on businesses while new rights for agency workers coming into force next week will cost business over £1.5 billion a year.

Ministers said the number of deregulatory measures being brought in during the last six months has tripled when compared to the first half of the year, up from eight to 25, while nine Government departments have reported a reduction in regulatory costs to business during 2011.

The Government said examples of simplifications included making it easier to inspect patents, through free access to online files, reducing the burden on companies when they update information on public record, simplification of the regulations and guidance governing contaminated land, extending the scope of self-certification of building work, and reducing the need for local authority inspection.

Business and Enterprise Minister Mark Prisk said: "During 2011 we have made real progress in cutting the costs of red tape for businesses.

"As well as the £3 billion saving for employers from the new indexation of pensions, we have seen a capping of other regulatory costs and a substantial rise in the numbers of deregulatory measures.

"This is an encouraging sign that the culture in Whitehall is beginning to change.

"People are beginning to realise that regulation must be the last resort, not the first option. There is much more to do - especially so that businesses really notice the difference - but this first year is very promising."

However, Dr Adam Marshall, policy director at the BCC, said: "This statement shows that ministers have failed to stem the flow of new regulation, even on their own measures.

"No Government, anywhere, should impose £45 million in new costs on businesses in the midst of a bumpy recovery and uncertain global economic climate.

"For business, this is where ministerial rhetoric comes crashing down and reality bites.

"The argument that 'regulation could have been much worse' falls flat in the real world, where patience on de-regulation is wearing thin. Ministers have promised much and must deliver.

"Worst of all, this statement doesn't include the agency workers' directive (AWD) - the proverbial elephant in the room.

"The Government has already admitted that AWD will cost British business over £1.5 billion each year, far more than any of the tiny regulations they are removing today.

"The Cabinet should have taken the chance to delay AWD, strip out the huge and unnecessary extra costs put in by our own civil servants, and save UK jobs."

John Walker, chairman of the Federation of Small Businesses, said: "It is good news to see that the list of regulations to be introduced this October is shorter than it has been in previous years. We also welcome the list of deregulatory measures - Government should be congratulated for that.

"However, these messages will be completely undermined by the introduction of the Agency Workers Directive and many of the recent proposals to make further burdensome changes to employment law such as the extension of the right to request flexible working.

"It is big changes in employment law that cost businesses in time and money and this is one of their biggest areas of concern."

PA