Dismantling the regulation that acts as a barrier to growth

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Vince Cable was at EEF this morning to announce the proposed changes to employment law.

Some of the proposals announced today have the potential to make a significant difference for employers. For example, encouraging the use of pre-conciliation services to reduce the number of tribunals should reduce the cost and burdens associated with unnecessary employment tribunals.

The strong emphasis of the coalition government on reducing the regulatory burden is encouraging, as regulation is one of the key barriers to growth and it is one that is within the government's control to affect.

In our Shape of British Industry report in 2010 we found that regulation is a major concern for manufacturers who rate it as the second-worst aspect of the UK business environment (after tax). More than half of respondents to our survey cited regulation as an obstacle to their growth plans.

Good news then, that we're currently in the midst of a key period for regulatory change with a series of reviews and consultations being announced. Next Monday the Löfstedt review of Health and Safety regulation will be published and on the day of the Autumn Statement the results of the manufacturing Red Tape Challenge will be announced. In January there will also be news on Environmental regulation.

We will be looking for announcements on regulatory changes that will make a material difference to the burdens that manufacturers face, particularly those that are specifically holding back growth.

Some suggestions that have come out of the manufacturing Red Tape Challenge include:

  • An export licensing system that supports growth by helping UK manufacturers compete in global markets. Member companies are reporting losing orders due to the protracted nature of the process and the lack of transparency over the progress of an application.
  • Waste packing regulations that are proportionate to the environmental benefit they deliver.
  • A fast-track process for changing an environmental permit where the risk of environmental damage is unchanged or going down. For example, where a building is being removed and/or an industrial activity is being discontinued at a site
  • Greater consistency between health and safety inspections. Inconsistency costs firms money and negatively impacts on their businesses. Companies are reporting being asked by one inspector to make costly safety modifications to machinery only to told by another on a follow-up visit that the measures were unnecessary.
  • A more efficient process for dealing with small injury claims. The fast-track system for small claims is slow and inefficient. As well as often taking months or years, the legal costs for claims settled at the earliest possible opportunity are very nearly equal to the full value of claim. A protracted process is not in the interests of employers or injured employees.

For more information on our key priorities for growth, see our submission to the Chancellor ahead of the autumn statement.

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