The Burdens Barometer is an independently produced calculation of the cumulative cost to business of new regulation compiled by the Manchester and London Business Schools. It is calculated using the Government's own figures as each Department is required to complete Regulatory Impact Assessments that evaluate the risks, costs and benefits of any new regulatory proposal that has an impact on business.Overall, the cost of regulation on businesses in the UK since 1998 has risen to £65.99 billion, up from £55.66 billion in 2007.
On a more positive note for the first time there are three regulations in this year's barometer, which actually produce an annual saving for business. Unfortunately, they are too few and far between.
For example, the Fire Regulatory Reform Order (regulation 77 in our Barometer), has provided a saving to business of £67 million. The impact on this year's Burdens Barometer of this saving was to cut the cumulative total by one tenth of one per cent.
Whilst this is a start, every year UK businesses are going to be hit with an additional £10.4 billion cost of regulation unless action is taken.
The uncomfortable truth for government is that despite two Acts of Parliament designed to make this possible: the Regulatory Reform Act (2001) and the Legislative and Regulatory Reform Act (2006), the increase surges on.
As a result of the first Act (2001-2005) the Government only issued 29 Regulatory Reform Orders and since the new 2006 Act only one Legislative Reform Order has been laid before the House: the Local Authorities Consent Requirements (Laid 25 July 2007). This compares with over 300 new regulations each year.
Two burdens from our ‘top ten burdens' in the Barometer that the Chambers of Commerce believes that Government should review are:
- The Data Protection Act - according to the Government's figures this has so far cost business more than £7 billion and given that it is nearly a decade old it would be a perfect candidate for Post-Implementation review.
- The Flexible Working (Procedural Requirements) Regulations 2002 have cost business £1.588 billion since 2002. Given that the Walsh Review on flexible working has already started it would be sensible to revisit regulations, which are accruing costs at a rate of £296 million p.a.
Tim Hutchings, Hertfordshire Chamber of Commerce & Industry Chief Executive, said, "If one also adds the amount of additional indirect taxation this government has cost business it is a fearful amount of money, it shows how resilient business people are. As our global competitors grow at an accelerating rate our businesses continue to be weighed down by increasing costs imposed by our very own government. Currently we are campaigning against the governments plans to add 2p to the cost of a litre of fuel.
Sally Low, Director of Policy British Chambers of Commerce said:
"The success of the Government's drive for better regulation must be judged on the extent to which the UK's regulatory burden has been reduced. On this basis the Government's record does not stand up to scrutiny. Our Burdens Barometer figure now stands at almost £66 billion compared to a figure of £10 billion in 2001 when we first compiled it.
"Initiatives without delivery will do nothing to help keep British Businesses competitive. We desperately need an Impact Assessment system that will challenge the need for regulation and a parliamentary process established that provides real independent oversight".
Professor Francis Chittenden of Manchester Business School, said, "The entry, for the first time, of regulation that reduces cost to business is welcome. However, the annual costs of regulation are still rising and government must deliver much more if its promises to business are to be realised".
Tim Ambler, Senior Fellow at London Business School, said, "The torrential rate of new regulation may explain why the Government cannot comply with its on rules. At the time of compiling this Barometer (six months after the end of the period), 25% of Regulatory Impact Assessments were either not available or wrongly recorded."