The Red Tape Challenge in summary (as at 15 May 2012)

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1 The Red Tape Challenge in summary (as at 15 May 2012) The Prime Minister set a challenge in April 2011: We need to tackle regulation with vigour both to free businesses to compete and create jobs, and give people greater freedom and personal responsibility... Our starting point is that a regulation should go or its aim achieved in a different, non-government way, unless there is a clear and good justification for government being involved. And even where there is a good case for this, we must sweep away unnecessary bureaucracy and complexity, end goldplating of EU directives, and challenge overzealous administration and enforcement The Red Tape Challenge has responded: 19 regulatory themes launched for comment on the website, totalling more than 3700 regulations Decisions made and announced by Ministers on 1500 regulations across 8 themes so far of these, well over 50% will be scrapped or improved. For example: 84% of Health & Safety regulations will be scrapped or improved, e.g. exempting 1 million selfemployed people from Health & Safety law whose work poses no risk of harm to others 73% of Environment regulations will be scrapped or improved a simpler and smarter approach will save business at least 1billion over 5 years, whilst maintaining important protections A radical package of employment tribunal reforms has begun, which will deliver an estimated 40 million savings per year to employers 1

2 One year on from launch, Red Tape Challenge is making sustained progress... Business, civil society organisations, trade and professional associations, and the public have a say on what regulations should be scrapped, improved, or kept: Over 227,000 visitors to our website so far Over 28,800 comments made Over 950 private submissions received 8 themes have completed the challenge process and begun implementation: Retail; Hospitality, Food & Drink; Employment-Related Law; Manufacturing; Road Transport; Environment; Health & Safety; and Equalities 7 more themes are scheduled to launch on the website by October 2012 A total of 123 Red Tape Challenge measures are confirmed for implementation by June 2012, including 99 repeals and 24 improvements a mixture of substantive deregulation and clearing out the dead wood In addition, Ministers have announced a new Focus on Enforcement initiative - to identify where inappropriate or excessive enforcement of regulation is holding companies back. Two reviews launched in May, looking at enforcement affecting small businesses in food and drink manufacturing, and the chemicals sector. 2

3 ... And significant deregulation is happening as a result Changes made already include: Employment: the first changes in a radical package of employment tribunal reforms delivering an estimated 40m of savings per year to employers; an increase in the qualifying period for unfair dismissal from 1 to 2 years; launch of an online tool for first-time employers taking on staff. Environment: clearer statutory guidance to reduce uncertainty about whether or not land is contaminated, saving business an estimated 140 million a year. Health & Safety: a change in the law to extend from 3 to 7 days the period an employee needs to have taken off work before an accident or injury needs reporting; establishment of a Challenge Panel of experts to tackle Health & Safety myths and incorrect use of Health & Safety regulations. Changes coming in 2012 include: Hospitality, Food & Drink: by October 2012, deregulation of many live music performances and scrapping regulations dictating the location and design of No Smoking signs. Health & Safety: legislative change so that employers will no longer be in breach of their duties in civil law where they have done everything that is reasonably practicable and foreseeable to protect their employees. The Queen s Speech 2012: Announcement of an Enterprise and Regulatory Reform (ERR) Bill to promote economic growth and cut the burden of red tape. 3

4 Government commitments so far include a major package of Environment regulatory reform... A package that will save business at least 1billion over 5 years, whilst maintaining important protections, by scrapping or improving 73% (185) of the 255 regulations reviewed. Includes: Introduction in April 2012 of clearer statutory guidance to reduce uncertainty about whether or not land is contaminated, saving business an estimated 140 million a year Reducing burdensome administrative bureaucracy associated with the 23.5m paper Waste Transfer Notes currently produced in the UK each year, by January 2014 Simplifying and strengthening air quality legislation, including removing obsolete regulations and modernising others - impact of existing legislation will be reviewed during 2012 with consultation on the findings in 2013 With business and environment organisations, a fundamental review of the estimated 10,000 pages of environmental guidance and 397 data sets, to make compliance simpler and more consistent without compromising environmental protections - reporting to Ministers by autumn 2012 Launch of a consultation in May 2012 on proposals to simplify the EU Emissions Trading System, to reduce the administrative burden of compliance. Revised regulations will take effect from January 2013 Working with the EU to revise guidance on data sharing for the registration of chemicals (REACH), potentially saving businesses 29m per year Focusing Environment Agency enforcement on high risk cases and taking forward trials of auditing by accredited third parties 4

5 A major package of Health & Safety reforms... Commitment to scrap or improve 84% (175) of the 207 regulations reviewed. Red Tape Challenge comments informed the independent Lofstedt Review, published 28 November The Government supports the recommendations made in the Review and went further in the 2012 Budget as a result of Red Tape Challenge. Commitments include: Legislative change in 2012 so employers are no longer in breach of their duties in civil law where they have done everything that is reasonably practicable and forseeable to protect their employees Establishment in April 2012 of the Myth Busters Challenge Panel of experts, to tackle Health & Safety myths and incorrect use of Health & Safety regulations Giving the Health & Safety Executive (HSE) authority to direct all local authority Health & Safety inspection and enforcement activity, to ensure it is consistent and targeted towards the most risky workplaces introduction of a code based on existing powers in April 2013 Amending the Reporting of Injuries, Diseases and Dangerous Occurrences Regulation (RIDDOR) and its associated guidance, providing clarity for business on how to comply with the requirements by Oct Legal changes, e.g. on no win, no fee cases, will help tackle the compensation culture Prime Minister s Insurance Summit (14 February 2012) the insurance industry agreed that it will: Produce guidance for SMEs setting out what is and is not required to demonstrate compliance with Health & Safety law when applying for insurance Challenge vexatious civil claims in order to tackle the compensation culture Pass on to customers the savings made when the Government reduces the 1,200 fee that lawyers can earn from small value personal injury claims 5

6 Big decisions on Employment-Related Law... Commitment to scrap or improve 43% (69) of 160 regulations reviewed. Includes: Major reforms to employment tribunals - the total package is expected to deliver 40m per year in benefits to employers. E.g. by mandating consideration of early conciliation; making mediation a key part of the dispute resolution process; increasing the maximum level for cost awards to businesses who win a weak tribunal claim; introducing fees to bring a claim to tribunal; an independent root and branch review of tribunal rules. Changing the qualifying period for unfair dismissal from 1 to 2 years from April 2012 Publication on Business Link website of new taking on an employee in 5 steps guidance for first time employers, in April 2012 the first phase in simplifying the whole process for employers A Call for Evidence issued in March 2012 on dismissal processes, and on introducing compensated no fault dismissal for firms with under 10 employees. Seeking views on reducing the 90 day consultation period for collective redundancies Call for Evidence issued in November 2011 Consulting on the effectiveness of the TUPE rules during summer 2012 Creating a universally portable CRB check that employers can view instantly online, from early 2013 Merging the current body of National Minimum Wage regulations into a single set of consolidated regulation by March

7 And a less bureaucratic approach to Equality A package that strips out unnecessary burdens in the Equality Act and scraps some of the powers and duties of the Equality and Human Rights Commission. Includes: Repealing third party harassment law, to ensure employers are no longer liable for the harassment of an employee by a third party (for example, by a customer). Consultation launched 15 May. Reviewing the public sector equality duty, to establish whether it is operating as intended. Repealing the socio-economic duty - a legal obligation on public bodies to consider the impact of their decisions on social class. Tackling gold-plating and over-compliance, by working with the British Chambers of Commerce to help SMEs understand what they do and don't need to do in order to comply with the Equality Act. Repealing employment tribunals wider recommendations powers, so they will no longer be able to recommend, for example, the introduction of, or changes to, policies that affect all of an employer s staff not just the employee who brought the case. Consultation on this change launched 15 May. Scrapping bureaucratic information-gathering procedures - special procedures were meant to increase settlements and reduce employment tribunal cases, but have led to more bureaucracy. Consultation on scrapping them launched 15 May. Repealing some of the unnecessary powers and duties of the EHRC, recruiting a new Chairman and smaller Board, and a further comprehensive review of the EHRC s budget by autumn

8 Further packages of regulatory reform that will benefit business, civil society organisations and individuals Retail commitment to scrap or improve 66% (170) of 257 regulations reviewed: A comprehensive programme of consumer law reform and simplification, including a Consumer Bill of Rights Consolidate and simplify the procedures for age verification or identification for the selling of agerestricted goods Simplify the burdensome poisons licensing system for low risk products, like fly spray or toilet cleaner, which pose no threat to consumers or the public Remove outdated requirement on retailers to notify TV Licensing about TV sales Hospitality commitment to scrap or improve 71% (81) of 114 regulations reviewed: Major deregulation of entertainment licensing in 2013 From October 2012 no longer dictate the location and design of No Smoking signs Remove requirement to have Energy Performance Certificates (EPCs) for holiday lets intended to be used for under four months in a year Reduce administrative burdens on premises with minimal alcohol sales, e.g. B&Bs Significantly cut number of food labelling regs from 31 to 17; and reduce number of food safety regs from 34 to 11 Road Transport commitment to scrap or improve 38% (141) of 376 regulations reviewed: Greatly reduce paper required to run a car, including scrapping the paper counterpart to driving licences, saving drivers up to 8m Simplify regulation surrounding the notification process (SORN) for vehicles that are not in use on the road Only issue hard-copies of V5C vehicle registration certificates for fleet operators when needed, with the potential to be rolled out to private motorists Package builds on major review of taxi law and big simplification of traffic sign regulation (already announced) Manufacturing commitment to scrap or improve 51% (65) of 128 regulations reviewed: Remove 38 defunct or obsolete regulations Streamline and improve procedures for export control Consolidate the often-changing safety regs for electrical products using UK plugs/sockets, at least every 10 years Consolidate and modernise the Gun Barrel Proof Acts which date from 1868 and need updating Negotiate within the EU to ensure views of UK stakeholders are factored into the proposed amendment of the EU Personal Protective Equipment Directive 8

9 A summary of Red Tape Challenge themes so far Theme Scrap Improve Keep No. of regs in theme % scrap or improve Announcement date Retail % 28 July 2011 Hospitality, Food & Drink % 29 September 2011 Road Transport % 15 December 2011 Health & Safety % 28 November 2011 and March 2012 Budget Manufacturing % 29 November 2011 Employment Related Law % 23 November 2011 Environment % 19 March 2012 Equalities Counts as 1 improve though elements of the Equality Act will be scrapped Counted as 1 (Equality Act) Totals % N/A 15 May 2012 Themes currently undergoing Red Tape Challenge process, with decisions to be announced later in 2012 Children s Services & Independent Schools Disruptive Business Models Maritime & Rail Energy Housing & Construction Company & Commercial Law Water & Marine Medicines Sports & Recreation Pensions Themes to be launched on the Red Tape Challenge website between May and October 2012 Civil Society Legal Services Aviation Insurance & Financial Services Business Services Planning Administration Healthy Living & Social Care In addition, a separate set of reviews is covering the enforcement of regulation 9

10 Some examples of what others have said in support of Red Tape Challenge proposals Dr Neil Bentley, CBI Deputy Director-General: We welcome the rigour with which the Government is tackling burdensome regulation which prevents businesses from focusing on growth. It is crucial that the process of repealing and streamlining regulations happens as soon as possible so that retailers can keep down costs and pass on savings to hard pressed consumers. Brigid Simmonds, Tourism Alliance Chairman: This is a significant first step to getting rid of some of the miles of red tape that strangle small tourism businesses. Much of this red tape provides no benefit to either the customer of the operator, yet takes up to 10% of operators time. Dr Adam Marshall of the British Chambers of Commerce: Employment regulations often create uncertainty for businesses and act as real barriers to confidence, growth and job creation. The BCC has long called for a reduction in red tape and a shake-up of the Employment Tribunal system, so we welcome the government s reform proposals, which respond directly to business concerns. Alex Jackman of the Forum of Private Business: That this Government is finally taking action to streamline and improve the system is brilliant news for SMEs who have for too long been drowning under a sea of needless rules and regulations that were ineffectual and over bureaucratic. Common sense should be at the heart of Health & Safety legislation and today appears to herald the beginning of the end for pointless red tape. Sam Corp, Head of Regulation, Environment Services Association (ESA) said: The announcement seems to have struck a good balance between protecting vital environmental standards and reducing unnecessary regulation. We particularly welcome the proposals to streamline environmental permitting and increase alignment with the planning regime. 10

11 For more information Launch of the Red Tape Challenge: Red Tape Challenge website: Focus on Enforcement website: BIS Press Office: 11