Cost of regulation on British business rises to £77 billion
27/03/09 | 00:01
The British Chambers of Commerce has today released its 2009 Burdens Barometer - the first time it has been published during a recession.
The Barometer shows that the cumulative cost to business of new regulation since 1998 has risen to £76.81 billion. This is a jump of over £10 billion from last year.
There is a positive note to this year’s Barometer with 18 regulations since 1998 now producing a total saving for business worth £1.4 billion. This is evidence that the government’s better regulation agenda is beginning to do its job. However, considering the current financial pressures on many firms, much more needs to be done to immediately reduce the overall burden.
With business cash-flow being severely squeezed and many good firms going bust, the uncomfortable truth is that despite three Acts of Parliament designed to reduce the regulatory impact, the steady increase continues.
In 2007/08, companies were hit with 19 new regulations costing them £1.75 billion.
The two most burdensome regulations in the Barometer are:
- Working Time Regulations 1999. To date this has cost business £17.8 billion with a recurring annual cost of £1.8 billion.
- Vehicle Excise Duty (Reduced Pollution) (Amendment) Regulations 2000 (EU Pollution Directive 98/69/EC). To date this has cost business £10.4 billion with a recurring cost of £1.2 billion.
Commenting David Frost, Director General of the BCC, said:
“Businesses are facing the toughest economic environment for a generation. Company cash-flow is being squeezed and unemployment is growing as a result.
“The government needs to get serious about reducing the massive burden of regulation on business. Cutting unnecessary burdens and announcing a moratorium on new regulations set to come in this year, is one way of providing instant and inexpensive help to British firms.”
Professor Francis Chittenden of Manchester Business School, said:
“After more than a decade of uncontrolled and often ineffective regulation, government must build on these welcome early signs of improvement by introducing regulatory budgets to contain the flow of new burdens on business.”
Click here to download the full 2009 Burdens Barometer in PDF format>>
Ends
Media Contacts:
Fiona Cunningham
Tel: 020 7654 5812
Email: f.cunningham@britishchambers.org.uk
OR
Sam Turvey
Tel: 020 7654 5813
Email: s.turvey@britishchambers.org.uk
Notes to editors
The Burdens Barometer is an independently produced calculation of the cumulative cost to business of new regulation which is compiled by the Manchester and London Business Schools. It is calculated using the Government’s own figures as each Department is required to complete Regulatory Impact Assessments that evaluate the risks, costs and benefits of any new regulatory proposal that has an impact on business.
The figures in the Burdens Barometer are compiled from the Regulatory Impact Assessments (IAs) produced by government departments and now downloaded into the British Chambers of Commerce RIA Database.
All government departments are required to complete IAs that evaluate the risks, costs and benefits of any new regulatory proposal that has an impact on business.
The figures show the Government’s own estimates of the compliance costs of a series of regulations affecting business up to 1 July 2009. Half of all IAs claim that new regulations provide benefits to businesses, consumers or the environment. However, historically these benefits are quantified in the minority of cases. As a result it is difficult to calculate the total value of the benefits that it is claimed justify the costs.
The three Acts of Parliament are; the Regulatory Reform 2001, Legislative and Regulatory Reform Act 2006, and the Regulatory Enforcement and Sanctions Act 2008.
The British Chambers of Commerce (BCC) is the National Voice of Local Business.
The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce serving business across the UK, which employ over five million people.