COST OF REGULATION TO BUSINESS RISES YET AGAIN TO MORE THAN £55 BILLION IN 2007
25/02/07 | 21:34
The regulatory burden is continuing to grow at an incredible rate. The rise in the recurring cost of regulation year on year has cost business an extra £1.6 billion in 2006, rising to £10.3billion from £8.7billion in 2005. While government continues to allow a net increase in regulation annually business will feel their competitive edge blunted on the global stage.
Examples of particularly burdensome regulations are the £6.6 billion it has cost UK Businesses to comply with the Data Protection Bill and the £1.2 billion cost associated with the Vehicle Excise Duty Regulations since 1998.
These figures confirm fears voiced by the British Chambers of Commerce (Deregulation or Déjà vu January 2007) that announcing initiatives is not enough. Delivery is key for businesses and very often this is where government is found out. There is a long way to go in actually cutting back the excess burden on doing business in the UK
Sally Low, Director of Policy and External Affairs at the British Chambers of Commerce, said:
“Despite talking tough on regulation this year’s figures are once again painful reading for business. The UK’s growing burden of red tape is unsustainable and economic success cannot be taken for granted. Unless this increase is curbed we risk significant damage to the competitiveness of UK companies.
"2007 needs to be a year of action not words.” Francis Chittenden, Professor of Small Business Finance at the Manchester Business School and co-author of the Burdens Barometer, said:
“The RIA system was invented to challenge the need for each of these new regulations. It clearly does not work.
“These figures show that Government rhetoric about listening to business concerns and reducing the burden of regulation is just that. The burden of regulation on business continues to grow unchecked and we predict this will continue until the Government machine has a complete rethink about the objectives that it is trying to achieve.”
ENDS
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MEDIA CONTACT:NOTES TO EDITORS:The figures in the Burdens Barometer are compiled from the Regulatory Impact Assessments (RIAs) produced by government departments and now downloaded into the British Chambers of Commerce RIA Database.
All government departments are required to complete RIAs 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 2007. Half of all RIAs claim that new regulations provide benefits to businesses, consumers or the environment. However, 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.
Technical Notes
The total figure excludes the costs to business of the National Minimum Wage Regulations 1999 and subsequent amendments to the rate.
Where RIAs have given a range of costs the Barometer has taken the mid-point figure. In those cases where certain provisions come into force later than the regulation itself, the reduction in compliance costs has been ignored.
The costs to business identified in the RIAs above are net of the benefits that accrue to business. The barometer is compiled each year from the data in the Regulatory Impact Assessments (RIAs) produced by government departments up to the prior 30 June extended to include the year in which the report appears, i.e. 30 June 2007 in this case. We include only those regulations with significant business burdens. The criteria for inclusion have not changed. Thus the barometer is purely a matter of arithmetic, totalling the major business costs created by departments and agencies, and we offer no judgements on government regulatory performance.
The figures from previous years have been revised in line with revisions to original RIAs and subsequent changes. The net effect of these revisions is to reduce the brought forward baseline for the current barometer’s accumulation to £44,831bn.
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.