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UK - Manufacturers call on government to cut red tape

26 September 2011

Britain's manufacturers have urged the government to redouble its efforts to achieve a meaningful reduction in the burden of regulation at a time when it needs to focus all its efforts on getting the economy growing. The call from manufacturers' organisation EEF comes ahead of the publication of the latest progress report on 'One in One Out' and the associated costs.

Publishing its own analysis of the government's performance 'Reforming Regulation, One Year On' EEF the manufacturers' organisation believes government has shown positive ambitions to date. These include the One-In One-Out Approach, greater scrutiny of new regulation by the Regulatory Policy Committee (RPC) and attempts to look at key areas such as employment and health and safety rather than picking at individual regulations.

But at a time when business is under growing pressure, it now needs to see signs of a genuine change in approach in Whitehall, some real reductions in regulation and greater effort to stem the flow of regulation from Europe. In the coming months, industry will be watching closely the government's decisions on extending the right to request flexible working, parental leave and equal pay audits to ensure that it is not adding unnecessary burdens on to business.

Government must also step up efforts to lead change at European level where there is a continued culture to push for more, not less, regulation. For example, the UK faces the risk of yet more employment legislation through the Pregnant Workers Directive which is expected to cost the private sector in the UK 3 million Euro, while our opt-out from the Working Time Directive is up for grabs again.

EEF Director of Policy, Steve Radley, commented "government has set out the right ambitions to reduce the burden of regulation and its approach has the potential to deliver it. But industry is now looking to see the new approach deliver real change. With major new measures such as the new national pension savings scheme in the pipeline for next year, the government needs to set out plans for where it can reduce the burden on employers."

"It also needs to ensure that any progress at home is not undone by the need to implement expensive and badly-designed Directives from Europe. With employers about to face significant costs from implementing the Agency Workers Directive, the government must show strong leadership in Europe and change a culture, which is still reaching for the Regulatory trigger as a first rather than the last option."

EEF's own analysis points to the following progress being made:

• A one-in, one-out system has been established requiring that, at least for domestic legislation, the total costs introduced are matched by the costs removed.

• The Regulatory Policy Committee has been given real teeth to challenge the impact assessments for proposed regulation.

• A number of regulatory reviews have been launched, including the Red Tape Challenge, that are accessible to all, as well as in-depth reviews of health and safety and employment law.

• The government has set out its stall for changing the EU approach to regulation and has begun the difficult task of building consensus.

However, the analysis highlights concerns that progress in other areas is lagging, or even in some cases is heading in the wrong direction. In particular EEF has highlighted the following issues with recommendations to address them:

• The costs imposed as a result of EU-derived legislation are excluded from the one-in, one-out system and are not being counted. It is essential that these are at least identified as part of the biannual one-in, one-out reports to ensure that they do not fall off the radar.

• The quality of EU impact assessments remains extremely poor, with no credible challenge function. The UK needs to tackle this issue and ensure that EU impact assessments are at a comparable level to those carried out in the UK.

• A false start has been made with an overly complex approach to identifying the alternatives to regulation. A more fit-for-purpose approach is needed urgently.

There are some early, albeit limited, signs of the government circumventing its own rules and disciplines. It has already ignored the specific advice of the RPC on three occasions, and some costs have been allowed to escape the one-in, one-out system on the basis that they are changes to penalties and not to regulations.

Radley added "the government has made significant progress in a short period of time. It is important that it now takes stock, adjusts direction where necessary and continues to press forward."

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