Cautious welcome for Brown budget

2005

Business leaders have given a cautious welcome to Gordon Brown's commitment to cut red tape in yesterday's budget but remain sceptical whether it will ever be delivered.

The decision to cut the number of statutory inspection bodies from 35 to nine was widely applauded.

National chairman of the Federation of Small Business (FSB), Carol Undy said: "There are currently over 300 different kinds of inspections carrying a right of entry into business premises and the whole army of inspectors desperately needs to be rationalised."

But she added: "Businesses have been promised bonfires of red tape in the past and they have never been ignited.

"Whether or not the report will result in 'fundamental change' and 'a red tape revolution' awaits to be seen."

Nick Goulding, Chief Executive of the Forum of Private Business (FPB), agreed that the commitment to slash the inspection burden was long overdue but said that the budget contained a number of missed opportunities.

"The public sector is still monstrously big and squeezes out the private sector. Most new jobs have been created in the public sector and are devouring wealth rather than creating it," he said.

"The investment that many business owners have made in private childcare facilities is also being greatly undermined by this budget, which will reduce the quality and diversity of childcare."

Bill Midgley, President of the British Chambers of Commerce (BCC), said that the moves were "a positive step forward, particularly on regulation."

But the extension of parental leave and the continuing high levels of public spending remained areas of serious concern, he added.

"British businesses remain deeply concerned about the burden that doubling paid maternity leave will create," he said.

"On the one hand, the Chancellor is proposing to reduce the administrative burdens on business while on the other, he is adding significant burdens by extending parental rights."

And he echoed the growing concern about the state of public finances:

"The Budget has not addressed the serious concerns that public spending and borrowing remains too high; and this could cause serious problems, for the economy in general, and for wealth-creating business sector in particular."

The BCC also said that the governments had made big promises to cut regulation in the past and delivered the opposite. And while it welcomed the tone of this week's report by the Better Regulation Task Force (BRTF), it warned that the proposals for a "one in one out" system could undermine the drive for a net reduction in regulation.

A clear timetable of achievable regulation reduction targets should be set as a priority, the BCC said, something the BRTF report did not set out.

But as the IoD pointed out, most business will only believe that change is afoot when they see it. The Government should publish an annual review of exactly which regulations have been removed and by how much the cost of red tape has been reduced, the IoD said.

"If the Government manages to implement these proposals, business will be very happy. The key is implementation and seeing fine words translated into action.”

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