Fewer Regulations, the Way to Go?
David Cameron has announced that "crazy" red tape business regulations will be slashed
in an attempt to "get out of the way" of small businesses, allowing them to succeed.
What is the "One in One Out" Rule?
An excess of 3,000 rules and regulations will be dropped
by David Cameron and his government. He claimed they would be the first government to leave with fewer regulations than when they came to power. However, some have criticised the move and accused Cameron of leaving the self-employed and other workers vulnerable by kicking out so many rules.
Regulations can cost businesses money, because of this the current government introduced the "one in one out" rule
. A rule must be selected and struck out before a new one can be introduced by ministers. Such rules and the current changes are said to potentially make a saving of £850 million a year
. 800 rules have already been eliminating using this rule.
Mr Cameron has said by doing so he is supporting risk takers and enterprise
in the country, but who will support the risk takers if it all goes wrong? Some of the proposed laws on the chopping block include no longer requiring child minders to have a food licence
to serve food to children and having a poisons licence to sell oven cleaner.
Regulations that serve no purpose make no sense, but there is a shift towards assuming that little or nothing should be controlled by regulation. Spending cuts mean there is already less inspection by the Health and Safety Executive
or local authorities. At the same time whilst business will be ‘freed’ from regulations it does not mean they will be free from the consequences of mistakes.
Where regulations can set out clear boundaries in the future any injury or damage that arises may give rise to claims under the long-standing rules of 'negligence'. The difference is that any such claims are likely to be more costly and take longer to investigate
. Less regulation may sound good but less certainty and higher legal fees does not.
Another area where regulation is to be scrapped is the house building industry, the government estimates it could make a saving of £60 million a year
if regulations were cut down to less than 10%. But Frances O'Grady, the TUC General Secretary, has condemned the move by saying it is "stripping self-employed workers of health and safety protection"
– more people will be exposed to injury.
Bad News for Victims of Sexual and Racial Harassment
Rules surrounding the need for businesses to protect staff from sexual and racial harassment
are also on the chopping block, and according to O'Grady, "sends a very clear signal" about whose interests the government is protecting.
Simpson Millar LLP Partner Bryan Nott comments, "It may not seem popular to 'stand up for regulations' but the easy headlines that condemn 'red tape' miss the important detail of what regulations do."
"They do not just protect the vulnerable, they also set out clearly what businesses and others need to do
. Well run, mindful, businesses should not find regulations costing them anything. The only ones that stand to gain are the businesses that either want to or already are cutting corners."