Businesses will welcome UK efforts to cut regulatory red tape

The package – the first in a series of policy initiatives – is focused on delivering benefits to businesses to facilitate progress on one of the prime minister’s priorities: growing the economy. A newly-published policy paper contains a range of measures that are intended to ensure that future regulation is applied proportionately and that government and regulatory intervention is not burdensome to business.

The measures include a number of employment reforms, such as a reduction to “time-consuming and disproportionate elements” of the Working Time Regulations, a commitment to reform the government’s ‘better regulation framework’ and a limit on the length of non-compete clauses in employment contracts. The paper also sets out a renewed regulatory focus on economic growth, requiring that regulators only take action and intervene when necessary.

Many businesses are likely to welcome this latest move towards deregulation in areas that would have previously deterred investment and hampered economic growth. The cumulative burden of regulation in recent years, alongside acute inflationary pressures, have made the challenges facing businesses, particularly small and medium-sized ones, much more pronounced. In this economic context, the government is keen to demonstrate that it is pro-business and can deliver growth. Indeed, a particular priority of the current administration is to boost the UK’s productivity by encouraging business investment, and these reforms could go some way to doing so.

In particular, the move to push regulators towards economic growth-oriented performance is an interesting intervention which could provide a degree of consistency and certainty for businesses in various industries. The deregulation plan will also give businesses confidence that their interests will be better represented in policy development. Savvy businesses will have this in mind when they consider their approach to political engagement.

This latest push for deregulation is also, of course, an attempt by the UK government to demonstrate the benefits of Brexit. Businesses will cautiously welcome these efforts to cut EU red tape, which came on the same day that ministers lodged an amendment to the Retained EU Law Bill to remove the so-called ‘sunset clause’ to prevent EU-derived law that is retained on the UK statute book from being revoked en masse.

The uncertainty over which retained EU laws would remain in place at the end of this year represented a significant source of concerns for many businesses, so this amendment will provide organisations with more clarity over future changes to legislation.