Posted by

Kamala Mackinnon, Policy Researcher

29 Mar 2012

Needless regulation creates uncertainty for companies and can detrimentally affect productivity with significant time spent on compliance activity rather than innovation and expansion. Over the years, regulations – and the inspections and bureaucracy that go with them – have piled up and up.

In recent weeks we have seen positive developments in the regulatory agenda, for example the Government’s pledge to accelerate the timetable to scrap or improve 84 per cent of health and safety regulations, including legislating in 2012 on ‘strict liability’ provisions and the rationalisation of environmental regulation to reduce costs to business by £1 billion over five years. Sector-based reviews of regulation have also been launched to ensure regulation is enforced at the lowest possible cost to business – something which will be welcomed by the many businesses that tell us that the enforcement of regulation is often a greater problem than the rules themselves.

Although doubling the unfair dismissal qualifying period to two years (which will come into place on April 6th) will boost business confidence to hire, more changes are needed to create a hard-hitting and complete deregulatory package. This includes reforming redundancy rules, introducing no-fault dismissal and tribunal fees. Reforms to mitigate the effect of the removal of the Default Retirement Age must also be put in place. With unemployment so high, it is crucial that these changes are implemented swiftly to give businesses confidence to invest and grow. Indeed, the BCC as made it clear in its recent report that there is still a long way to go before the Government can claim it has got to grips with red tape.