Is this the beginning of the end for red tape?

Business minister Mark Prisk is due to reveal the Government's first red tape-cutting measures later today. Will it be everything businesses hoped for?

by Emma Haslett
Last Updated: 06 Nov 2012
When MT spoke to small business minister Mark Prisk a couple of weeks ago, he assured us the Government would finally begin delivering its promises on red tape before the Budget. And so it has come to pass: Prisk will give a speech today at the Federation of Small Businesses which is expected to outline big changes to the regulatory burden placed on businesses. And early indications are encouraging: among the measures due to be announced is, apparently, a three-year moratorium on new regulation for businesses with fewer than 10 employees. It’s been a long time coming – will it have been worth the wait?

The new rules won’t necessarily go down well in all quarters: one measure, for example, does away with workers’ rights to request training, and plans to extend flexible working rights to parents of children up to the age of 17 will also be scrapped. And while Prisk is a last-minute substitution for the speech (Vince Cable was called away at the last minute to discuss Libya), he may be more appropriate: an ex-entrepreneur, Prisk has always been keen to push the Coalition’s agenda on small businesses.

Will the measures be enough? It’s certainly hopeful: according to a survey of over 500 SMEs by TheCityUK, 46% said they want regulation to be ‘cut in real terms’, while 11% said new rules should only be allowed if they’re replacing ones that are already in place (which sounds similar to the ‘one in, one out’ policy we still haven’t heard much about). Oddly, 10% said they’d like the UK to ‘pioneer new regulation’ – so either they’re in favour of a radical approach, or they just didn’t understand the question properly.

Growth is another issue the Government has yet to address, and according to the survey, more than a third of businesses said the best way to boost growth would be by improving access to finance. The Forum of Private Business agrees; in its pre-Budget submission, the lobby group argues that the process needs to become more flexible (so that, for instance, local relationship managers can make lending decisions, instead of faceless credit committees) and also more transparent (so there are clear timelines, and a straightforward complaints procedure when applications are denied).

Clearly, these announcements will be enough to cheer businesses. But the Government needs to do more to win over SMEs; as Pimlico Plumbers founder Charlie Mullins puts it: ‘these are the businesses that make money for the Treasury, and they need to be helped’. Reducing red tape is always significantly harder in practice than it is in theory – for starters, how much of the regulatory burden comes from the EU, rather than the Government? But if growth is a priority, helping Britain’s entrepreneurs to spend less time on compliance and more time on growing their business makes a lot of sense to us. So this is a good first step…

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