UK grown choked by ‘red tape and taxes’, claim CBI

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RED tape from Brussels and Westminster threatens to choke off Britain’s anaemic economic recovery, according to a report to be published today by the CBI, while airports warn that tax rises will cut passenger numbers by ten million.

Despite Chancellor George Osborne and Business Secretary Vince Cable both promising to slash regulations, the CBI has warned that businesses were forced to stump up an extra £177.7 million last year to comply with new rules.

For every £3 of costs removed by the UK government, a further £5 of costs was added by new regulations, the business organisation said.

The report, Changing The Rules – Eight Steps To A Better Regulatory Regime, said “urgent action is needed to tackle an ingrained culture where there is too little detailed thinking about the real impact of regulation on business”.

Katja Hall, the CBI’s chief policy adviser, said: “The Autumn Statement contained some really welcome proposals to improve the accessibility and accountability of the regulators that enforce many of the rules, but the facts speak for themselves.

“Small businesses are the engines of growth, but they’re telling us they are drowning under the weight of extra regulation coming out of Whitehall, layered on top of outdated red tape that has not been repealed.”

Hall added: “We’re calling on the UK government to back up its words with action. We want to toughen up the law so every piece of regulation has a sunset clause and expires after a set date unless it is renewed.

“We want the regulation minister to personally sign off each extra piece of regulation and business laws to be subject to greater scrutiny in Parliament.

“We want a culture shift in Whitehall, with greater transparency and accountability in how regulation is created, and more detailed analysis of what it will mean for businesses, with civil servants bringing in external expertise to fully inform thorough impact assessments.”

Her comments came as a second report – to be published today by the aviation industry – highlights that the Office for Budget Responsibility (OBR) predicts Osborne will receive £1 billion less through air passenger duty (APD) over the next five years than was previously predicted. Some ten million fewer passengers are expected to take flights between 2011 and 2017, the OBR added.

Darren Caplan, chief executive of the Airport Operators Association, said: “These recent forecasts are evidence of the growing damage APD is having on passenger demand.

“The UK government needs to assess the wider effects of the UK’s eye-wateringly high levels of APD.”