Coalition to tackle red tape

By Hannah Brenton

There will be a three-year moratorium on new business regulations, the government will announce today.

Business minister Mark Prisk is expected to announce the plans to cut red tape at the Federation of Small Businesses (FSB) annual conference, after business secretary Vince Cable was called back to Westminster for an emergency Cabinet meeting.

Mr Prisk is expected to outline proposals to suspend workers’ rights to request more training at companies with fewer than 250 employees and remove regulations giving parents flexible working hours until their children reach the age of 17.

The scaling-back of regulation comes as business groups increase pressure on the government to cut red tape for small businesses in the Budget next week.

But figures released by Labour show that government promises to cut red tape have so far fallen flat.

Under the coalition agreement, the government introduced a ‘one in, one out’ rule, which pledged any increase in regulation would be met with a cutback elsewhere to ease the burden on business.

But figures compiled by the Labour party show that the rule is not being applied. The majority of departments have introduced more regulations that they have removed – and only one, Scotland, is adhering to the ‘one in, one out’ rule.

The figures are likely to be embarrassing for the coalition, as a number of ministers have spoken at length about the benefits of applying the ‘one in, one out’ rule.

Earlier this month, Mr Cable said every regulation faced a ‘cost-benefit’ analysis by government departments.

“In the regulation field, what we now do is we say if any new regulation is going to come in, it is subject to what is called the ‘one in, one out’ test, so that a regulation of equal value has to be got rid of,” he said.

“And this is acting as a break on all the red tape that is inhibiting business and it also introduces some real rigour into the process.”

But Mr Cable’s own department has the worst record. The Department of Business, Innovation and Skills (BIS) has introduced 46 new measures, but so far cut none.

John Denham MP, shadow business secretary, commenting on the analysis, said the government’s promises to reduce regulation were “falling apart”.

“The Tory-led government’s grand promises on reducing regulation are falling apart,” he said.

“The promises of an attack on regulations in next week’s Budget will be met by a hollow laugh.”