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Cabinet Office News Release 11 January 2006

CAB/001

New Bill to enable delivery of swift and efficient regulatory reform to cut red tape - Jim Murphy

Cabinet Office Minister Jim Murphy today introduced a Bill to Parliament that would provide a swift and effective mechanism for delivering the Government's radical regulatory reform programme to cut red tape.

The Legislative & Regulatory Reform Bill aims to make it quicker and easier to tackle unnecessary or over-complicated regulation and help bring about a risk-based approach to regulation.

The Bill would help deliver a number of the wide-scale reforms announced in the Better Regulation Action Plan in May 2005 - a programme that has been widely endorsed by business, public sector and voluntary sector stakeholders.

It would do this primarily by creating a wider law reform power than that in the Regulatory Reform Act 2001. This will allow the Government to deliver reform of outdated or over-complicated legislation more quickly, and enable the mergers of those regulators not currently covered by separate legislation.

Jim Murphy, Cabinet Office Minister, said:

'The Legislative and Regulatory Reform Bill marks a crucial step toward a Britain free from unnecessary red tape.

'The Bill is good news for business, the public and voluntary sectors. The 2001 Regulatory Reform Act delivered significant benefits to these sectors, but does not go far enough to meet the demands of the Government's radical new agenda for regulatory reform.

'The new Bill aims to make it simpler and faster for us to cut the burden of regulation and embed a light-touch, risk-based approach to regulation. It will enable us to deliver long-term benefits to the UK economy and improve our status as one of the world's most attractive places to do business.

'The Bill is essential to deliver our wider radical regulatory reform programme. We are measuring how much red tape costs businesses and voluntary organisations so we can cut it, consolidating the number of national regulators, and driving through ambitious plans to simplify or reduce unnecessary bureaucracy across Government.'

The Bill includes:

A new power to reform outdated, unnecessary or over-complicated legislation , enabling regulatory reform to be delivered swiftly and efficiently. This power to reform the law by order is intended to be used to implement:

• Measures identified in departments' simplification plans (due by the end of 2006)
• Uncontroversial Law Commission recommendations (including those reforming the common law)
• Structural reform of regulatory bodies, including those Hampton mergers not being taken forward through separate legislation

There are safeguards in the Bill limiting the circumstances in which the power can be used, including measures to guarantee appropriate levels of consultation and Parliamentary scrutiny.

Measures to encourage a risk-based approach to regulation and inspection by requiring regulators to have regard to the independent Better Regulation Commission's five principles of good regulation. These principles will embed a risk-based and proportionate approach to better regulation, encouraging effective enforcement.

Measures to make legislation coming from the EU easier for UK organisations to deal with. The Bill will reduce the number of pieces of domestic legislation needed to implement an EU directive in the UK , and make new obligations more transparent and easier to understand for British organisations affected by them.

Stakeholder support:

John Cridland, CBI Deputy Director-General, said:

'The Better Regulation Bill is a key plank in the foundations of the Government's better regulation agenda, and the ability to deliver more regulatory reforms quickly and efficiently is good news for business. Crucially, the Bill seeks to bring about a lasting culture change in officials' attitudes to risk and regulation, which is the real prize for business.'

John Walker, Federation of Small Businesses National Policy Chairman, said:

'Regulatory burdens are amongst the main barriers to growth with which our members struggle.  If this Bill can reduce them and free up their potential economic growth, unlike previous deregulatory attempts, this will be genuinely good news for the small business sector.'

James Walsh, Institute of Directors Head of Regulation, said:

' This Bill is about putting in place the right machinery to help deliver the Government's reform plans and slash costly over-regulation. We welcome what it stands for, provided it is accompanied by the necessary culture change across Whitehall in order to fully deliver benefits and help businesses to focus more on innovation.'

David Frost, Director General of the British Chambers of Commerce, said:

'Employers warmly welcome this Bill which could be a major step forward in the drive to reduce the burden of regulation on business. Complicated and costly regulations are one of the main barriers to business growth, especially for smaller companies.  Employers will now be looking for the Government to fully implement its programme and achieve a NET reduction in the costs of complying with regulation.'

Better Regulation Commission Chair Rick Haythornthwaite said:

'I welcome the introduction of this Bill, which will enable the government to deliver simplification proposals - including the removal of outdated, unnecessary or complicated legislation - quickly and efficiently.'

Notes to Editors:

• The Legislative and Regulatory Reform Bill, formerly a Bill for Better Regulation, was announced in the Queen's speech on 17 May 2005 .
• A review of the Regulatory Reform Act 2001 was conducted in 2005 following a Government commitment to review the operation of the Act and a recommendation to do so by the independent Better Regulation Task Force (BRTF) in their report, Regulation - Less is More . (On Jan 1 2006 the BRTF became the Better Regulation Commission). The review was published in July 2005 and is available on the Cabinet Office website: http://www.cabinetoffice.gov.uk/regulation/documents/pdf/br_act_review.pdf
• Following the review of the Regulatory Reform Act 2001 a consultation was undertaken which included proposals to amend the 2001 Act. The consultation ran from 20 July to 12 October 2005 and is available on the Cabinet Office website at: http://www.cabinetoffice.gov.uk/regulation/documents/pdf/consultation_doc.pdf
• 77 responses were received from the private, public and voluntary sectors as well as from individuals. A summary of the consultation responses was published on the Cabinet Office website on 14 December and is available at: http://www.cabinetoffice.gov.uk/regulation/documents/pdf/consultation_responses.pdf
• The Legislative and Regulatory Reform Bill is accompanied by Explanatory Notes and a Regulatory Impact Assessment. All these are available at: http://www.cabinetoffice.gov.uk/regulation/bill/index.asp
• Background on how a Bill passes through Parliament can be found at http://www.direct.gov.uk/Gtgl1/GuideToGovernment/Parliament/ParliamentArticles/fs/en?CONTENT_ID=4003228&chk=EKScpA
• The Government has decided that the Bill should, for the sake of future flexibility, retain the power to make the Enforcement Concordat statutory, as envisaged in the consultation document. In the light of the divided views expressed during the consultation, however, it has not yet decided whether to make the new Concordat statutory, or whether to trial the Concordat as a voluntary agreement.
• The Government accepted Philip Hampton's proposals to merge 31 regulators into 7 themed bodies in the March 05 Budget. Find copies of the original Hampton Report at http://www.hm-treasury.gov.uk/budget/budget_05/press_notices/bud_bud05_presshampton.cfm

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