On the same week that Labour’s Shadow Business Secretary Chukka Umunna announced the opposition’s plans to tackle “blue tape”, a study has shown that the Coalition Government’s high profile Red Tape Challenge has failed to have any real impact for small and medium sized businesses. The survey concluded that a paltry 7% of businesses found the Challenge had “some effect” on their business. More than half (52%) said the Government’s deregulation push had “no impact”, and the remaining 41% unsure what difference the campaign had made to them.
Richard Smith of Croner, the company behind the research, said:
“There hasn’t been the bonfire of regulations that the government promised. Many of the reductions are in areas that touch customers infrequently, or have been repackaged into consolidating legislation. That’s because much of the drive towards regulation is EU driven and therefore there is very little that the UK government can do to change those laws.”
Much of the criticism of the Red Tape Challenge has noted that EU regulations – the source of some of the largest pieces of legislation affecting UK businesses – are outside the scope of the Challenge and so, for many businesses, compliance costs have actually increased while the Government continues to bang the deregulation drum. The introduction of the Agency Workers Regulations in 2011 is often cited as an example of the Government’s failure to account for EU rules.
The introduction of Employment Tribunal fees is also singled out for criticism, Croner’s Carol Smith noting:
“Since the introduction of the red tape campaign, the Government has made a number of positive employment law changes, including the introduction of tribunal fees to cut down on speculative claims. However, employers have been saying these have been a nightmare to implement because the Government have waited to the last minute to apply them, in turn creating more confusion for employers.”