Business groups want red tape further scrutinised

The independent regulatory body designed to monitor Government business regulations should be granted greater powers if it is to defend small and medium sized enterprises (SMEs) against new regulations, says the Federation of Small Businesses (FSB).

In a report the FSB claims that the external Regulatory Policy Committee (RPC) should be doing more to scrutinise regulatory performance and advocate reform by liaising with the Government and businesses, such as models in place in America, Australia and the Netherlands.

Despite an ongoing Government drive to reduce the burden of red tape, including the 'one-in one-out' rule regarding new legislation, research from the FSB found that one in ten small firms saw the cost of complying with regulation increase over the last year, with 60 per cent of those surveyed saying the cost of compliance costs more than £1,000 a year.

Britain currently ranks 83 out of 142 countries for the regulatory burden it places on businesses, according to a 2011/12 report from the World Economic Forum.

The FSB has advised that the RPC voice opinion and publish annual reports on all regulatory performance and that it should suggest advice and explore possible alternatives. It also wants the RPC to be established as the single point of call for businesses should problems arise.

John Walker, National Chairman of the FSB, said: "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. It needs to be able to scrutinise performance in a transparent way and be a powerful advocate for Government-wide change."