Proposed regulation unveiled to cut red tape and grow the economy

The first package of deregulatory reforms claimed to grow the economy, cut costs for businesses and support consumers was unveiled Wednesday 10th May 2023 by the government.

Taking advantage of post-Brexit freedoms, the Government is to remove some unnecessary red tape and regulatory burdens, ensuring rules and regulation for British businesses is proportionate and takes into consideration wider impacts on consumers, innovation and competition – as well as direct costs.

This package is the first of a series of deregulation announcements expected through 2023 and focussing on delivering benefits to business. It is claimed that the reduced reporting requirements could save employers over £1 billion per year.

This is all part of the help to deliver the Government’s priority to grow the economy and move on the UK’s ambition to have one of the most innovative and agile regulatory regimes in the world.

The package includes:

  • Reducing time-consuming and disproportionate reporting requirements for specific elements of the Working Time Regulations, while retaining the 48-hour week requirement and upholding world leading employment standards. This is claimed to potentially save employers around £1bn a year. Also simplifying regulations that apply when a business transfers to a new owner.
  • Reforming the Better Regulation Framework to ensure future regulation of the UK changing economy is streamlined, minimises business burdens, and puts forward-looking regulation at the heart of Government decisions.
  • Improving regulators’ focus on economic growth by ensuring regulatory action is taken only when it is needed, and any action take is proportionate. Following Professor Dame Angela McLean’s review, the government intends to consult on refreshed guidance on how regulators deliver their growth duties. They will also consider the merits of commencing statutory reporting and how best to promote growth with utilities regulators, who are currently not in scope of the Growth Duty.
  • Promoting competition and productivity in the workplace by limiting the length of non-compete clauses to three months, providing more flexibility for up to 5 million UK workers to join a competitor or start up a rival business after they have left a position. The change will boost the wider UK economy, supporting employers to grow their businesses and increase productivity by widening the talent pool and improving the quality of candidates they can hire.
  • Stimulating innovation, investment and growth by announcing two strategic policy statements to steer regulators, and today publishing the first of these statements for consultation, on energy policy, which will be followed soon after by a strategic steer to the Competition and Markets Authority (CMA).

Over the past few decades, we have seen a build-up of regulation in every aspect of our lives. Businesses have faced hundreds of new rules, costing time and money to read and comply with thousands of pages of regulations.

These rules make it expensive and hard for startups to enter the market or to scale up and grow. They have reduced competition, raised prices and reduced innovation, leaving consumers worse off and UK firms less competitive in global markets.

Business and Trade Secretary, Kemi Badenoch:

I have listened to the concerns of business of all sizes and have made it a priority to tackle the red tape that holds back UK firms, reduces their competitiveness in global markets and hampers their growth.

We are taking back control of our laws after Brexit, reducing and improving regulation and giving businesses the freedom to do what they do best – sell innovative products, create jobs and grow the economy.

Tina McKenzie, Policy Chair of the Federation of Small Businesses (FSB):

For years and under all Governments, well-meaning Ministers have reached to create new regulations in response to issues.  This is then repeated under the next set of Ministers – leaving us with a high cumulative burden for business to deal with.

We are pleased to see a change of approach here, moving away from regulation as a first resort, alongside a reduction in administrative requirements that divert time away from running a business, and more of a focus for regulators on stimulating economic growth.

Taking advantage of the new status as a sovereign and independent nation, the UK has set its own tariff regime via the UK Global Tariff to cut tariffs so we can reduce prices for UK consumers; introduced the UKCA marking to improve goods regulation and will pass a Data Protection and Digital Information Bill to set a new, less burdensome approach than the GDPR.

The Edinburgh Reforms of UK financial services include over 30 regulatory reforms to unlock investment and turbocharge growth in towns and cities across the UK.

The Retained EU Law Bill, which is currently passing through parliament, will end the special status of retained EU law (REUL) by the end of 2023 ensuring the UK’s statute book will not include reference to the supremacy of EU law or EU legal principles.

The government has an opportunity to look at regulations and decide if they’re right for the UK economy, if they can scrap them, or reform and improve them, this could help spur economic growth.

To ensure that the Government can focus on delivering more reform of REUL, to a faster timetable, they are amending the REUL Bill to be clear which laws to revoke at the end of this year. This is to provide certainty to business by making clear which regulations will be removed from statute book.

The government will retain the powers that allow continued amendment to EU laws, so more complex regulation can still be revoked or reformed after proper assessment and consultation.

The reforms we are announced are not just for central Government, they will also provide a clear signal to regulators that driving innovation, investment and growth should be at the heart of what our regulators do.

PAYadvice.UK 10/5/2023

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