Red tape 'holding back the economy'

Business leaders are urging the Government to do more to tackle red tape and bureaucracy, warning that the problem was holding back the economy.

The CBI said tens of millions of pounds in extra business red tape was coming from Whitehall and Europe.

Action was needed to reverse an "ingrained culture" where the impact of regulation on business was not properly considered, said a report.

Policies created in 2011 alone would add £177 million to UK businesses, said the CBI.

Katja Hall, the CBI's chief policy director, said: "Regulation has an essential role to play in a thriving market economy, promoting competition and protecting consumers, but we know it can be a major barrier to growth.

"The Autumn Statement contained some really welcome proposals to improve the accessibility and accountability of the regulators that enforce many of the rules, but the facts speak for themselves. Small and medium-sized businesses are the engines of growth, but they're telling us they are drowning under the weight of extra regulation coming out of Whitehall, layered on top of outdated red tape which has not been repealed.

"We're calling on the Government to back up its words with action. We want the regulation minister to personally sign off each extra piece of regulation and business laws to be subject to greater scrutiny in Parliament.

"We want a culture shift in Whitehall, with greater transparency and accountability in how regulation is created, and more detailed analysis of what it will mean for businesses, with civil servants bringing in external expertise to fully inform thorough impact assessments."

Business Minister Michael Fallon said: "We have reduced the cost of domestic regulation on business by almost £850 million since the start of 2011, but are determined to go further and faster to lighten the load of regulation for UK firms.

"Our new one in, two out rule tightens the screw across Whitehall, so that departments see legislation as a last resort, not the default option. We are bringing common sense back to how regulations are enforced, working hard to stem the flow of regulation from the EU and are already tackling many of the points the CBI raise."