The deputy prime minister wants small businesses to be subject to no more than two inspections a year by all regulators.
Speaking to small-business leaders in Shoreditch, east London today (25 October), Nick Clegg said the HSE, the Environment Agency and other regulators must understand that their roles are to make the lives of small businesses easier, not harder.
He told the audience that the country needs small firms to grow and insisted that “a culture change” among regulators is paramount if this is to happen. He said: “So, there will be a major shake-up of business inspection, going through the regulators, asking: ‘are they still necessary?’, ‘should they still exist?”
“Making sure that, yes, they intervene when necessary, they offer advice and support but, otherwise, they let you get on with it. They will need to respect the Regulator’s Compliance Code, which says regulators must think about and encourage economic growth, and they will have to make sure they aren’t breathing down your necks.”
He went on to say that the Government would seek to impose a cap on the number of inspections that regulators can conduct on any one small company. “Why, for example, should regulators be able to turn up at your door whenever they want, and as often as they want?” asked the deputy prime minister. “Why can’t we limit the number of inspections to, say, two a year, ensuring these bodies coordinate among themselves to stick within that limit?”
Adding that some regulators may even be scrapped, he said: “Which body does what can be extremely unclear, so we’re minimising the number of authorities you will have to deal with in the future; introducing sunset clauses for new regulators; placing them under rolling review.
“If they become irrelevant, or their functions are replicated elsewhere, they’ll go.”
Mr Clegg stressed that some regulation is “hugely important for business” but acknowledged reports that the typical small-business owner spends around a day a week complying with regulation instead of bringing in new business.
Responding to the speech, the TUC pointed out that a new survey of SMEs by the Department for Business, Innovation and Skills (BIS) suggests that employment law and health and safety regulation do not even feature in their list of concerns.
Said Brendan Barber, TUC general secretary: “Regulation is there to protect us all from businesses that rip us off, trash our environment, and risk our health – or even our lives. However, it is only of use if it is enforced. Enforcement should not be seen as a burden on business, but instead a way of ensuring that good businesses are not undercut by cowboys who disregard the law and cut corners, whether it is on paying VAT, or not polluting our rivers.
“Cuts in enforcement will put even more of us at risk of damaged health, or injury, or death in our workplaces.”
The Hazards Campaign bluntly accused Mr Clegg of talking “utter cobblers”, adding: “Not only is it cobblers, it is dangerous, toxic, life-threatening cobblers. This is yet another assault launched by the Tories on laws and enforcement that protect workers, now with clear support from the Lib Dems.”
IOSH also took issue with the deputy prime minister’s suggestion that health and safety regulation adds to the burden of small businesses, and stressed that unannounced health and inspections must be allowed to continue. Its head of policy and public affairs, Richard Jones, said: “Good health and safety isn’t ‘red tape’ – it saves lives, supports enterprise and sustains the economy. The Government must ensure standards of public and worker protection will be maintained, before considering further cuts to health and safety inspections.
“It’s important to remember that, sometimes, health and safety inspectors may need to make unannounced visits following serious complaints, concerns, or incidents in order to ensure people’s safety is not being put at risk. This must not, under any circumstances, be impeded.”
He added: “Mr Clegg also needs to recognise that research shows many businesses actually welcome proactive inspections, as they provide free, high-quality, practical advice and support.”
The Federation of Small Businesses (FSB) said it would like to see inspections booked in advance, as it allows businesses to have the right people on site and get the most out of the inspection. However, it also fears the HSE’s cost-recovery proposals could harm the existing relationship between small businesses and the regulator.
FSB chair John Walker said: "We support moves by the HSE in taking a more proportionate risk-based approach to inspections. However, we would not want to have good working relationships between business and inspectors potentially undermined through the high flat-rate fees proposed under fee for intervention. Businesses want to be compliant and sometimes need help and support to do this. They should feel able to approach the HSE for advice and not be fearful of large fees.”
