Government wants to cut red tape for business but critics remain

Amid the grim news from Britain’s high street last week – with more well-known companies on the brink – the Scottish Retail Consortium (SRC) said the sector was “at a crossroads”.

SRC chairman Ken MacKenzie urged the Government to “support the sector’s efforts to flourish’’ by “holding back the costs for which they are responsible, including business rates, retail levies and the burden of regulation’’.

The SRC has already described the SNP Government’s plan for a “public health levy’’ on large retailers who sell both alcohol and tobacco as a revenue-raising raid on supermarkets and previously appealed for business rates not to be increased.

Its new report, ‘Retail: Serving Scotland’s Communities’, warned that increasing red tape, higher government-driven operating costs and the continuing economic uncertainty could “accelerate current trends of falling footfall, store occupancy and retail employment’’.

The report said: “Public policy decisions will be crucial in determining which path is open to Scottish retail, the 240,000 people it employs directly and the many more it supports in Scotland’s other major economic sectors.’’ The report highlighted the sector’s contribution to the economy, with retail employing more people than tourism in Scotland. It now accounts for 9 per cent of all employment in Scotland – down from 10.5 per cent in 1998, with the report warning a loss of retail jobs could have “significant social implications’’, with the industry providing flexible working hours that it said “enable many people to work who would otherwise be excluded from economic activity.” “Government can support the sector’s efforts to flourish, to renew growth in sales of highquality Scottish products both in shops and to new online markets, and to sustain thousands of jobs by holding back the costs for which they are responsible, including business rates, retail levies and the burden of regulation.’’ On the Government’s part, Enterprise Minister Fergus Ewing is encouraging organisations across Scotland to suggest improvements to the regulatory framework to encourage sustainable economic growth.

Before Christmas, Ewing led a debate in the Scottish Parliament on Scotland’s regulatory framework and confirmed that the Scottish Government will consult this year on detailed proposals for a Better Regulation Bill which will be brought forward in 2012-13.

He also stressed that appropriate regulation is essential to help build economic growth and welcomed the publication of the annual report of the Regulatory Review Group.

“In Scotland our focus has been, and will continue to be, better regulation. I see little merit in one-in-one-out protocols or other complicated targets to reduce the number of regulations as we see in the UK. Instead, we should ensure that our regulations are proportionate, consistent, transparent, accountable and targeted.

“Successful businesses are essential to drive economic recovery and the Scottish Government is considering every dimension of public policy to ensure that we support the business community.

“Our approach to regulation is an important part of this drive, because it protects businesses from unfair competition, and from rogue traders and also safeguards our environment, heritage and our communities for future generations.” The Government’s economic strategy includes a commitment to further improving the efficiency of the public sector, including a focus on better regulation. It also affirmed that the Government will continue to work with business – through the Regulatory Review Group – to develop and apply regulations in a way which addresses social or environmental needs and supports business growth.

“The contribution of the Regulatory Review Group is essential to this. Professor Russel Griggs and his team should be commended on their work in identifying regulations that cause concern for our businesses and for their efforts in trying to resolve specific problems.

“Their report also stresses the importance of a partnership approach to this issue and I will continue to visit businesses and regulators to find out what aspects of regulation could be improved. This will stand us in good stead as we approach a consultation on the issue ahead of legislation.” Professor Russel Griggs OBE, Chair of the Regulatory Review Group, said: “I am pleased with the progress the Regulatory Review Group is making across a broad range of issues which shows how effectively our partnership approach between business, regulators, and government is working.

“In the coming year, we look to progress a number of our current issues and projects further as well as to widen both the areas we work on and the pace of change within regulators, local authorities, etc.” The Government’s programme recognises “that businesses can benefit from regulation which is transparent, accountable, proportionate, consistent, and targeted only at cases where action is needed.” It adds: “There is scope to improve further the way regulations are applied in practice across Scotland, by better defining national expectations and standards and the context for local variations. We will therefore bring forward a Better Regulation Bill in 2012-13, following detailed dialogue with national and local regulators, COSLA and local authorities and the business community.” Professor Griggs commented: “RRG is also looking forward to contributing towards the proposed Better Regulation Bill and continuing to work with Scottish Government ministers, and in particular the Minister for Energy, Enterprise and Tourism to ensure he can say government does work for business.” But critics of the regulatory environment remain. CBI Scotland’s Assistant Director, David Lonsdale, said the RRG’s report was a “welcome testament to the benefits of government and industry working together, underpinned by a shared agenda that regulation should be subjected to the same initial research and development, market testing, and post-launch evaluation that any new commercial product would undergo.

“Unfortunately the Scottish Government has fallen well short of this agenda with its disappointing refusal to publish a full and frank assessment on the implications of its two new regulations which will see larger retailers and firms with empty premises hit with a business rates bill totalling £146m over the next three years.

“The refusal to publish a full Business & Regulatory Impact Assessment for either of these two new regulations is a serious omission and flies in the face of the Scottish Government’s own best practice guidance and better regulation agenda, in which it promises to genuinely consult with businesses prior to the introduction of new regulations. The proposed formal review of BRIAs must restate the need for such assessments to be mandatory.” According to the RRG’s annual report: “Business and Regulatory Impact Assessments are the most important ongoing tool to ensure that legislation is being correctly assessed and the impact measured prior to introduction. We therefore need to ensure that they are being completed thoroughly for all appropriate legislation and regulation.

“We are working with officials in Scottish Government on the first formal review of BRIA. This review is already under way and once the review is completed RRG will work with Scottish Government to ensure that any lessons learned in the first year of its introduction are bound into the process going forward.

“In the light of the formal approach that RRG has received in recent times regarding the issue of ministerial exemptions to doing BRIAs, we will be looking particularly at how these have been used since BRIA started and if appropriate making further recommendations if we identify opportunities to enhance current arrangements and outcomes.

“With regard to the proposed Better Regulation Bill, RRG will look to ensure that any changes this will make to the process of consultation and legislation are built into BRIA going forward.

“As the Scottish Government seeks greater responsibility for its own affairs, including fiscal powers, we will be keeping a watching brief on developments to ensure that the impact on business of any new regulatory proposals in respect of this is fully considered and avoids unintended consequences.

“With Fergus Ewing seeing better regulation at the heart of what he wishes to achieve during this term under the banner of ‘Business works for Government so Government should work for Business’ then we will work closely with him and other members of Scottish Government to help achieve that goal.”