We reported yesterday on the REC’s commitment to taking up the government’s red tape challenge in 2012 with the aim of advancing opportunities for PAYE umbrella contactors and other flexible workers.

However, they will have their work cut out for them according to a recent analysis by the British Chambers of Commerce (BCC), which concludes that despite the government’s commitment to cutting red tape, the regulatory burden on UK businesses remains far too high.

For example, the coalition’s ‘one-in-one-out’ approach, which requires departments to ditch old and outmoded laws if they want to introduce new ones, is deeply flawed, according to the BCC, because around 42% of regulations fall outside the policy. There is also evidence that some departments are resistant to the government’s policy of increasing transparency – the BCC had to resort to Freedom of Information (FOI) requests to get hold of some regulatory Impact Assessments from several departments.

BCC Director General John Longworth said “Regulation affects businesses every day. While some regulation is necessary to improve markets, an excess can add unnecessary burdens and hinder growth among businesses. Needless regulation creates uncertainty, and damages productivity, distracting firms from innovation and expansion. It is crucial that the drive to reduce the regulatory burden is treated as importantly as all other aspects of economic policy.”

Contractors from umbrella companies seeking new opportunities in 2012 will doubtless agree with his conclusion: “Only substantive and real reductions in the regulatory burden will give companies confidence and enable them to plan for future growth with certainty and clarity.”

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