9 Nov 2007 11:22 AM
Government set to save business over £100 million

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2007/097) issued by The Government News Network on 9 November 2007

John Hutton Secretary of State for Business today brought forward measures to cut red tape and save business millions of pounds in the Regulatory Enforcement and Sanctions Bill.

Many businesses are currently losing out because local authority regulators are enforcing the law differently across the country. The Bill would give powers to a single national body to provide consistent advice. It will also ensure regulators do not impose unnecessary burdens.

Rogue businesses also face a crackdown with regulators being given new powers to tackle companies who seek to benefit by flouting the law.

It is estimated that these measures could save business over £100 million per year.

John Hutton said:

"This is about saving businesses millions by cutting red tape and delivering better regulation.

"To help us achieve this, we will take powers to stop regulators from imposing burdens that aren't necessary.

"But we will toughen the sanctions for the companies who undercut honest businesses or endanger or rip-off their customers by flouting the rules. We will come down hard on the rogues by giving all regulators the power to hit them where it hurts and impose sanctions that leave them out of pocket or out of business."

The measures include:
* Ensuring both national and local regulators have access to new administrative sanctions, such as monetary penalties and stop notices.

* Ensuring both national and local regulators do not impose or maintain unnecessary burdens on those they regulate.

* Setting up the Local Better Regulation Office (LBRO) to be the expert source of advice for central Government on the way local authorities regulate. It will settle disputes between local regulators and ensure more consistency for businesses.

Case studies:
An Oxfordshire man was fined £30,000 for dumping 184 drums of toxic waste, but he had been paid £58,000 for the disposal of the material. The waste authorities then spent £167,000 incinerating the waste properly.
A small waste disposal company was fined £25,000 for operating without a license, but the company saved £250,000 by operating illegally over a 2-year period.
A construction company was prosecuted following an incident that resulted in two employees being trapped in an unsupported excavation whilst laying pipes. Despite the site engineer being aware of the risks, no attempts were made to stop the work. This could have proved fatal. The court fined the company £8,500.
A manufacturer who has sites in different areas of the country cleared a new product line with their primary authority (the local authority appointed their main regulator). They then dispatched the product to the retailer. Despite the Primary Authority's advice, a different local authority believed the product violated food imitation regulations and threatened the store with prosecution. The manufacturing business claims this incident cost them £25,000 in wasted stock.

There was extensive consultation with businesses on the ground-breaking plans in May. The Regulatory Enforcement and Sanctions Bill is the latest step in the Government's Better Regulation agenda aimed at eliminating obsolete and inefficient regulation, achieving user-friendly and effective new regulation and tackling inefficiencies in the way regulations are delivered. This includes a commitment to cut the cost to business of administering regulation by a quarter by 2010.

Businesses served with an alternative sanction will have a right of appeal to an independent tribunal. The tribunal, like the criminal court, will be able to award costs.

Notes to Editors:

1. The bill is delivering key recommendations of the Macrory review.

2. A draft regulatory enforcement bill went to consultation earlier this year.

3. The Better Regulation Executive is taking forward the Government's better regulation agenda.

4. The Bill introduced before Parliament can be found at http://www.publications.parliament.uk/pa/pabills/200708/regulatory_enforcement_and_sanctions.htm

Department for Business, Enterprise & Regulatory Reform
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