Government failing to hit red tape target

A public spending watchdog has raised concerns that the Government's attempts to significantly reduce the burden of red tape on UK businesses are not working.

The publication of a new report by the Public Accounts Committee (PAC) reveals that the Government has made limited progress in reducing the cost of regulation on business.

Its target is to reduce the total cost of regulation by £10 billion between 2015 and 2020. But the report finds that the Government has so far achieved less than £1 billion in savings, and that is "almost entirely down to it counting the mandatory 5p plastic bag charge as a 'saving' for retailers because of the additional revenue it brings them".

However, many new regulations, including the National Living Wage, have been excluded from the Government target. The Federation of Small Businesses (FSB) has raised concerns about the exclusion of tax administration and other regulatory costs from the scope of the target.

"We support the Government's drive to de-regulate, but we are not seeing the current full regulatory picture or evidence of changes on the ground," said Mike Cherry, FSB national chairman.

"The Government's Business Impact Target currently fails to capture many of the day-to-day struggles and worries of small businesses, such as taxes like the new National Living Wage. In addition, it is concerning that many Government departments don't know the cost of existing regulations."

The FSB says it supports the Government's attempts to try and reduce the regulatory burden, but says this is "impossible" without clear information.

Cherry said: "FSB members tell us regulation is the number one issue they want this Government to focus on. As we face the challenges and opportunities of Brexit, it is vital that we bolster business productivity, and remove burdensome red tape. The Regulatory Policy Committee has an important role to play, and we want ministers to reflect this growing role by affording it greater powers and scope."

The FSB is urging the Government to act on the PAC report and says it will work with the Better Regulation Executive (BRE) to develop a better understanding of the cost of regulation imposed on business.

"This agenda needs to be tackled if small business owners are to trust Government wants to make their life easier," said Cherry. "We urge the Government to act on this report so small businesses don't feel so overwhelmed by regulation."

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