RED TAPE has cost British firms an extra £3.1bn over the course of this parliament, despite government plans to slash the cost of regulation, think tank Reform said today.
The auto enrolment pensions changes had cost £2.7bn, while the EU’s Alternative Investment Fund Managers’ Directive had cost £1.2bn, Reform said.
By contrast, the biggest saving from deregulation was £304m from audit and financial reporting changes.
Reform found new red tape cost £4.3bn, while deregulation has saved firms £1.2bn – a net cost of £3.1bn.
Meanwhile, Thomson Reuters found a 13 per cent rise in the number of EU laws in 2013, compared with 2012. A total of 1,497 new laws came out of the EU last year.
The City has been rocked by a series of rules directed at finance, including the bank bonus cap and the attempts to create a financial transactions tax. Meanwhile a study by Kinetic Partners found just two per cent of senior finance executives believe the wave of new red tape has done anything to reduce the risk of another crash – indicating firms are being hit by costly regulation, for no real benefit.
The department of business, innovation and skills (BIS) disputes the Reform report, arguing that the government’s promises on red tape related only to UK rules and not EU regulation.
And the government also argues the automatic enrolment pensions costs should not be counted as an increase to red tape.
“Our efforts to cut domestic red-tape has been independently verified and received external scrutiny from the Regulatory Policy Committee,” said a spokesperson.
“They have confirmed that by getting rid of pointless rules we’ve delivered a net saving to business of well over £1.5bn a year.”