Freeing Britain's Entrepreneurs to Thrive and Innovate

On Thursday, I caught the Entrepreneur's Express North to the MADE Festival in Sheffield. Both the train, and later the festival itself, were full of bright, enthusiastic young entrepreneurs, soaking up advice on how to start their own firms or sharing their experience of doing business in Britain.

But it struck me that even at MADE, in such an optimistic, dynamic, 'can-do' atmosphere it was obvious that Britain's business owners and managers are desperate for government to get to grips with red tape and bureaucracy. They don't want expensive grant schemes or subsidies, they just want government to create a competitive environment in which they are free to thrive, innovate and create jobs.

I remember that feeling of optimism when I started my business, back in the 1990s – and I remember how frustrating red tape was back then, too. Of course, nobody wants to scrap regulation entirely – well designed regulation is critical to the effective operation of markets, and the protection of consumers and employees. But poorly-designed or unnecessary red tape is a real brake on growth, and ever since I have been committed to cutting that burden wherever we can.

That is why, this morning, we published the second Statement of New Regulation. This document lists all the regulations that government departments plan to scrap or introduce – or in some cases, have already scrapped or introduced – between July and December of this year. It's a summary of how well the new 'One-in, One-out' system is working. And it holds some modest good news for hard-pressed businesses and the entrepreneurs I met last week.

Combined with the first Statement of New Regulation, covering January to June of this year, we've seen a £3 billion saving for employers from the new indexation of pensions and the capping of other regulatory costs during 2011. The number of de-regulatory measures has increased three-fold between the first and second halves of the year. And 60 per cent of departments have delivered a net reduction in the cost that they impose on business. In short, this Statement shows that between July and December of this year there are ten 'INS' but 25 'OUTS'.

When combined with everything else that the Government is doing to tackle bureaucracy, this represents real progress. The Red Tape Challenge – which is looking at all 21,000 existing regulations and giving individuals and businesses the chance to tell us what works and what doesn't, what should be simplified and what should be scrapped – has identified 160 retail regulations to be ditched or merged, with more sectors and themes to report in coming weeks. Britain's smallest businesses, and new start-ups, continue to benefit from the moratorium on new domestic regulation. And by directly copying EU regulations straight into domestic law, we've ended 'gold plating' to stop British firms being placed at a competitive disadvantage to their European counterparts.

There remains a long way to go. But this Statement shows that the culture in Whitehall is changing. People are beginning to realise that regulation must be a last resort, not the first option. And in this challenging economic period, every hurdle that we remove from the path of a new start-up or existing firm means better growth, more private sector employment, and greater progress toward re-building and re-balancing our economy.

Mark Prisk MP
Minister for Business and Enterprise

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