Regulation Task Force concerned with competitiveness

The Better Regulation Taskforce has found encouraging signs that its five principles of good regulation are influencing Whitehall thinking. However, it has voiced concern over the impact of continual demands for regulation on the competitiveness of small businesses in its fourth annual report.

The Task Force's five principles of good regulation are: transparency, proportionality, accountability, consistency and targeting.

Lord Haskins, Chairman of the Task Force, said: "The important thing is to ask whether the levels of protection expected by the public could be achieved without recourse to regulation and to make sure that the economic impact of proposals has been properly measured. One of our main concerns is the impact.

"We should also recognise that very often the worst effects are not caused by the regulation itself but by poor enforcement."

Lord Haskins highlighted six themes that have recurred over the four years the Task Force has submitted reports to the Government over regulation:

1/. Worker protection and anti-discrimination, where over-ambitious regulation can sometimes be counterproductive, inadvertently encouraging discrimination or destroying jobs or imposing unreasonable burdens on small firms.

2/. Public health and safety, which could often be better safeguarded by enforcing existing regulations more effectively, rather than creating new ones.

3/. The environment, where the economic impact of regulation can easily be underestimated.

4/. Public sector bureaucracy, which prevents head teachers from running their schools and keeps doctors away from their patients.

5/. Tax and benefits, which are being increasingly administered through the payroll, with rising costs for smaller firms.

6/. Utility regulation, which is too complicated and may hinder investment.

The Task Force has now published 22 reports, containing over 300 recommendations, only 8 of which have been rejected.

Lord Macdonald, Cabinet Office Minister, said: "The Task Force plays a vital role in keeping Government on its toes. It lays down a challenge to departments to improve the quality of their regulation, and I am encouraged that the vast majority of its recommendations have been accepted by Ministers."

Michael Groom, President of the Institute of Chartered Accountants for England and Wales (ICAEW), said: "Our members work in and with businesses of every size and have first hand knowledge of the harmful impact of bad regulation on UK competitiveness. The Task Force's introduction of the five principles of good regulation - transparency, proportionality, accountability, consistency and targeting - has influenced Whitehall for the better.

"Despite these positive moves, small businesses are still being hit hard by regulation. At present, Regulatory Impact Assessments are not as effective as they should be. The Small Business Litmus Test is often done in a routine and peremptory manner. For enterprise to flourish, we need to create a business environment where regulation is only introduced after thorough consultation and is limited to what is really required. We look forward to continued progress on this front."

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Richard Powell, UKTECH