Queen's Speech Places Increased Regulatory Burden On Businesses, Warns ACCA

by Robin Pilgrim, LawAndTax-News.com, London

07 November 2007

Despite a pledge in the recently delivered Queen's Speech to "reduce regulatory burdens on business", via the introduction of new legislation, accounting and business groups have warned that the initiatives announced run the risk of increasing the burdens faced by businesses in the UK.

Commenting on Tuesday, the Association of Chartered Certified Accountants (ACCA) argued that:

"While many of the new business initiatives are well-meaning, in some cases the balance of responsibility for implementing them is weighted too heavily towards businesses themselves."

Speaking with regard to the proposed National Insurance Contributions Bill, the ACCA stated that:

"Reforms to modernise the tax and benefit system are welcome. But the alignment of the Upper Earnings Limit (UEL) for Class 1 National Insurance Contributions (NICs) purposes must not be a pre-cursor to future tax increases."

Commenting on the planned Regulatory Reform Bill, however, the ACCA announced that:

"This offers the opportunity for meaningful progress to be made with regard to business burdens imposed by local authorities. ACCA believes that it could be a step in the right direction if enforcement practices are made more consistent and effective."

"In the light of the Government’s previously-announced commitment to reducing business burdens, ACCA is concerned to avoid new burdens being brought in to replace those that are being cut back."

"While ACCA does not oppose proposals such as those to extend work-life balance provisions, and the new initiative on pensions, it would be wrong to place too great a responsibility on employers to put these plans into action. A light regulatory touch is needed to ensure entrepreneurs and businesses are able to operate in an increasingly competitive environment."

Meanwhile, Miles Templeman, Director General of the Institute of Directors (IoD) observed of the Queen's Speech that:

“Gordon Brown’s first Queen’s Speech shows that government still thinks it can solve everything by legislation and regulation."

He continued: “The package addresses many of the right issues – especially skills, energy and transport. But too often the proposals are about Government imposing top-down plans, rather than Government making it easier for businesses, individuals and communities to find the solutions that work best for them.”

On the Employment Bill, the IoD welcomed the plan to replace the employment dispute resolution system.

Mr Templeman stated that:

"This is the first regulatory improvement that should be noticed by business. The Gibbons Review made sensible recommendations and it is good to see progress. However, we are concerned that other parts of the Bill seem to be about stronger enforcement regimes – which could mean that the net burden of regulation increases yet further."

On the Planning Reform Bill, he continued: "We desperately need to move our planning system into top gear. If these changes lead to better and faster decisions on major transport and energy projects, then it will be very welcome. We also need to see serious improvements in the residential planning system."

Mr Templeman added: "It appears that the Planning Gain Supplement has been dropped. If so, this is good news."

The announcement by the Queen that legislation will be brought forward "to protect depositors and ensure confidence in the banking system" has been welcomed, with the Confederation of British Industry (CBI) observing on Tuesday that:

"Businesses will be pleased to see the inclusion of measures to increase confidence in the British banking system, particularly the provisions to safeguard investors' deposits. The Government must be careful not to dampen innovation in the UK’s successful financial services sector however."

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