Blair's drive to cut red tape welcomed by industry

Prime Minister Tony Blair has announced that all Whitehall departments have been asked to identify areas of legislation that are ripe for reform as part of a drive to cut red tape for British businesses.

In his speech to industry leaders at the Confederation of British Industry conference in Birmingham, Mr Blair acknowledged four main weaknesses in the UK's economy:

• Productivity: The gap between the UK and its competitors;
  
• The weakness of Britain's infrastructure;
  
• Unnecessary and redundant regulation;
  
• The need for further economic integration at EU level.

The Prime Minister went on to outline the key ways in which these weaknesses will be addressed. These include:

• Investment - in transport, education, skills and technology, adding value to the goods and services produced by the UK;
  
• Innovation - particularly in IT and communications;
  
• Modernisation - in public services and a greater role for business through Public-Private partnership;
  
• Deregulation - including the Regulatory Reform Act.

Michael Groom, President of the Institute of Chartered Accountants (ICAEW), was quick to welcome the announcement to cut red tape at a recent debate on the direction of the Government's Enterprise agenda.

Mr Groom said: "The cumulative impact of red tape is taking its toll on small businesses who are struggling to cope with the deluge. We are pleased that Whitehall has been charged with identifying areas of legislation that can be reformed. This is a valuable first step. Beyond that, Government needs to ensure that the regulatory burdens on business are kept to a minimum and that new regulation is always justified in terms of benefit over cost. What we need is revolution not evolution. Current mechanisms aimed at keeping regulation in check are simply not working."

Guest speakers at the ICAEW debate included Sarah Anderson, Chief Executive of the Mayday Group, a London-based recruitment agency. She said: "The cumulative burden of regulation has become a major issue. Even the time spent trying to understand new regulations, to find out whether they apply to you can be crippling for a small company."

She described employment law as "an increasing nightmare leading to unintended consequences," and pointed out that finance for small businesses must be accessible and relevant and called for it to be demand led.

She blamed excessive red tape for putting off businesses from applying for public financial assistance, citing Research and Development Tax and the Small Firms Training Loan as examples of this.