Regulation
Background
The work of the Chamber network on reducing the regulatory burden on business has been highly influential. The Chancellor accepted many of our key policies to cut unnecessary burdens and the chamber network is now actively involved in implementing the Government’s new policies.
BCC has focused on identifying the cost of regulation (the latest calculation found an extra cost on business of £50.27bn since 1998). BCC also produced a report on Regulatory Impact Assessments (RIA), which focused on how to reduce the costs and prevent unnecessary additional burdens.
The Burdens Barometer is compiled in partnership with academics from the London and Manchester Business Schools. The ‘Burdens Barometer calculates the compliance cost to business since 1998 of new regulations. It is calculated using the Government’s own RIA figures which means it reflects the Government’s own generally conservatively estimated costs. It has been calculated at £10 billion in 2001; £5 billion in 2002; £20.6 billion in 2003; £30 billion in 2004, £38.9billion in 2005 and this year at £50.27 billion. The report is the most reliable of its kind and receives widespread coverage in the media each year.
The 2006 RIA Report found that major Government departments are still failing to calculate the cost/benefits to business of new regulations. The report shows that the rules are not followed rigorously, few proposals quantify the benefits and, in particular, that in the latest year the costs of regulations far outweigh the quantified benefits.
BCI Position
BCI welcomes the policies set out in the Hampton Report and Better Regulation Taskforce Report to reduce the number of inspections and introduce a risk based approach. BCI recognises the need for proportionate regulation. However, we want such regulation to be well targeted and business friendly. Our key policy positions are:
Legislative and Regulatory Reform Bill
· As the Bill progresses through both Houses of Parliament, the Government must ensure that the correct balance is found between equipping Parliament with the necessary regulatory reform powers and the need to ensure that established Parliamentary procedures and safeguards are not undermined.
· BCI welcomes the Government’s announcement in April 2006 to amend the Bill.
· A new commitment for a mandatory post audit of new regulations should be included. · A more ambitious target than the existing £10bn per annum savings cited in the current Bill should be set by the Government.
· On the basis that this is just an enabling Bill, BCI recommends publication of targets across Government to cut regulatory costs and the publication of Departmental simplification plans. As Ministers cite 2006 as the year of delivery details must be published with urgency.
Regulatory Impact Assessments
· The preparation of major RIAs should be outsourced to professional experts, so that objective assessments of costs, benefits and regulatory alternatives are produced independently of the regulating departments.
· Legislation must be subject to a review to ensure that it is having the intended effect.
· The review process could be included in the RIAs, which could specify how and when new regulations will be monitored.
· Ministers should sign off that the new regulation is cost effective and that it will deliver the policy objectives with the least cost to business.
· Business should be reimbursed for any departmental financial gains and the policy costs that they incur on behalf of the regulating department.
· The benefits of new regulation must justify the costs.
The Measuring Administrative Burdens
· BCI has calls for a new system to measure the regulatory burden, to set specific targets and ensure political commitment and incentives to meet the targets.
· BCI therefore supports the Government’s commitment to measure across all departments the costs of complying with regulations and produce specific and achievable targets to reduce these costs.
· However, there are a number of concerns about the Standard Cost (Dutch) Model and BCC will work with Government to ensure the model produces thorough and reliable data on regulatory costs
· BCI is not convinced that the international Standard Cost Model (SCM) methodology being adopted by the UK Government is going to enable departments to achieve the Government’s objective of a net reduction in regulatory costs. We also remain concerned that even if reductions are achieved, the system currently being adopted will not necessarily enable these reductions to be confidently calculated or monitored.
BCI Activities
BCI contributes to the BCC’s Burdens Barometer annually.
If you would like to find out more about what the Chamber is doing to lobby against more regulation contact Charlotte Ritchie on 0121 454 6171 or email c.ritchie@birminghamchamber.org.uk.