Julian Smith: A bonfire of red tape will help re-ignite our economy

Given the financial legacy left by Labour, the coalition still has limited ways of encouraging enterprise but one area where it can make a real difference to UK plc is by radically improving the conditions for business by freeing them up to sell and innovate, grow and create jobs.

The launch of the Red Tape Challenge (www.redtapechallenge.cabinetoffice.gov.uk) sees the Government laying out – sector by sector – every regulation so business can say why they want it to be removed.

This will mean each business having the opportunity to voice their views on annoying regulations that impact on them. General burdens on business will be consulted on too. With the commitment that “this consultation will presume that all regulations identified as burdensome would be removed unless good reasons are given for them to stay”, I hope that many Yorkshire businesses will have their say to ensure that we take up the Government’s offer to delete many daft rules from the rulebook for good.

Regulation and red tape have been stifling British business for years. It was the source of frustration for me when I ran a small international business. It is particularly frustrating for business owners today. As well as dealing with exceptionally difficult economic conditions, form-filling, rules and complex law divert increasing amounts of their time from their day to day trade.

Britain has been sliding down the league tables and is now 89th out of 139 countries in the World Economic Forum’s “business perceptions of the burden of regulation” rankings.

When we were riding on the credit and housing bubble, the regulation agenda was seen as something to be dealt with but never a major priority.

The Better Regulation Taskforce came and went and Labour’s Cabinet-level regulation “star chamber” lasted just a few meetings. Ultimately, in spite of many initiatives, Labour matched “spend, spend, spend” with “regulate, regulate, regulate”. leaving Britain with six new regulations a day.

Another development in this year’s Budget was the moratorium on any further regulation on micro business – those employing less than 10 people – until 2013.

Micro and new business have suffered most from the regulatory avalanche and this decision is a great relief to the backbone of our economy.

I want to see this pause become a full stop – there is now the opportunity to start addressing Government policy initiatives in a non-regulatory way. For example, if the Government really wants more flexible working, how do we encourage more honest conversations between employer and employee so that businesses get a fair chance to plan ahead? And why does this moratorium need to be restricted to micro business? Surely every business should be relieved of all but the most essential regulation while our economy remains in intensive care?

The final policy is a commitment by Government to look at the EU rulebook. Many of the frustrations faced by business come from the EU and the decision by Government to go through, line by line, European legislation is to be applauded. But it needs to be serious, passionate and committed to action.

Rather than just “urging change” on the Commission as the Budget states, Vince Cable’s expense claims should include multiple Eurostar tickets over the coming months as he personally ensures that Brussels knows that Britain is deadly serious in dealing with the burdens the EU is imposing on our economy.

I am delighted that the Government is committed to dealing with regulation. But it needs business and individuals too to give their view and press for change. While dealing with regulation and red tape has been an aspiration of many governments, this time we must make it happen.

We need to hold the coalition to its commitment. Every single rule and regulation, whether proposed or existing. must be analysed and, if not absolutely necessary, thrown out.

The Chancellor has committed to giving Britain the most attractive tax environment in the G7 by the end of this Parliament. I want us also to be the easiest and most hassle-free place to do business.

Failure to do so will not only affect growth in the short-term, it will also make the fierce winds of competition from the East and Latin America impossible to repel.

As Michael Bloomberg, the Mayor of New York, recently warned: “Every day, every city in this country and in this world is trying to get those businesses.”

Julian Smith is the Conservative MP for Skipton and Ripon.