SME regulatory reform demanded

The independent body set up to scrutinise new government regulations needs sharper teeth to defend small businesses, the FSB has warned.

The FSB has published a report which argues that the Regulatory Policy Committee (RPC) needs more powers to scrutinise performance, advocate regulatory reform and act as an ombudsman.

The report, entitled ‘Regulatory reform: where next?’, also calls on the government to look at models from the USA, Australia and the Netherlands to see what structural changes could be put in place to improve the UK’s regulatory system.

FSB national chairman John Walker says, ‘Poorly designed, ill-thought out regulation isn’t just an irritation for small businesses, it costs in time, money and may not even achieve what it set out to.

‘It’s good that the Regulatory Policy Committee is there to clamp down on this sort of bad regulation, and we welcome the government’s progress so far on this issue, but the RPC needs real powers if it is to drive change and challenge Whitehall culture.’

While the FSB welcomes the government’s regulatory reform programme so far, FSB figures show that in the last year four in ten small businesses saw the cost of complying with regulation increase and six in ten said the cost of complying with regulation costs more than £1,000 a year.

Despite numerous initiatives, only one in three impact assessments for new regulations show the regulations are fully fit for purpose. Further, the UK ranks 83 out of 142 for the compliance burden it places on businesses.

The FSB believes that this performance could be improved if the RPC was able, for example, to ensure that issues it identifies in impact assessments were thoroughly addressed by the relevant government department, and it was able to publish its opinions on all impact assessments.

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