Brown wooing business sceptics with red-tape plan

May 24 2005 by Nic Paton Print This Article

British Chancellor Gordon Brown has outlined plans to cut business red tape, adding flesh to proposals in last week's Queen's Speech to slash the number of inspections carried out on employers.

But with Brown criticised by many in the businesses community as the man most responsible for adding to the red tape burden in the first place, he is likely to have to work hard to overcome scepticism among captains of industry.

Brown, writing in today's Financial Times newspaper, said the Government is to bring forward a bill designed to replace unnecessary rules with a "risk-based" approach.

The Chancellor, who is meeting businesses today to discuss the best way forward, is also urging employers to put forward a list of regulators they feel are redundant and should be abolished.

Key to Brown's plans are the Regulatory Reform Bill, announced in the Queen's Speech last week, but there will also be a new bill to tackle unnecessary laws and regulations.

"The modern challenge is to enhance the flexibility needed for a successful economy and to tackle the regulatory concerns we know all industrial economies face, without sacrificing the standards a good society needs," said Brown. Britain's regulatory model was largely unchanged since Victorian times, and was based on the implicit principle that it was necessary to "inspect all premises, procedures and practices, irrespective of known risks or past results", he added.

"Under this model, everyone was inspected continuously, information demanded wholesale, and forms filled in at all times, the only barrier being a lack of regulatory resources," he said.

Under the proposed new regime, business leaders would be consulted on which regulations should be stripped out or simplified. The Regulatory Reform Bill aims to cut the number of official regulators, with inspectors in future targeting "bad traders" rather than simply inspecting everyone continuously. "Under a risk-based approach, there is no unjustifiable inspection, form-filling or requirement for information," Brown told the newspaper. What was needed was "not just a light touch but a limited touch. Instead of routine regulation trying to cover all, the risk-based approach targets the necessary few," he added.

Brown has already promised to cut the number of inspections carried out each year by one million.

The Regulatory Reform Bill, which will be introduced early next year, will reduce the number of regulatory bodies from 29 to seven, and the bill to remove unnecessary and outmoded laws will follow later.

Regulation with a light touch was "more effective than a heavy hand", he added.