Good practice: explaining the UK Enterprise and Regulatory Reform Act

The UK government has published a set of documents on the newly adopted Enterprise and Regulatory Reform Act 2013 (see previous post for its content). They supplement, for a wider public, the "official" dossier made available by the National Achives on legislation.gov.uk which contains the text of the Act, the "explanatory notes" and the RIA. This public information pack contains a 9-page "guide" with an overview of the content of the reform and a "policy paper" giving the rationale of the reform and what each measure aims to achieve. The objectives of the reform are defined as"cut(ting) the costs of doing business in Britain, boosting consumer and business confidence and helping the private sector to create jobs." The dossier also contains four "indicative timetables" of implementation.
This is a good example of how to communicate on legislation using the right tools and formats for each phase of the process and each type of public, for hopefully smarter regulation. A similar approach is provided by the EU "summaries of legislation".

Enactment of major Act on regulatory reform (UK)

On 25 April, BIS Department announced that following adoption in Parliament the Enterprise and Regulatory Reform Act had received Royal Assent. This text aims to support long term growth through a range of legal, managerial and institutional measures:

• company law reforms to make sure there is a link between directors’ pay and long-term company performance by giving shareholders of UK quoted companies binding votes on directors’ pay;
• a better employment tribunal system encouraging parties to come together to settle their dispute before an employment tribunal claim is lodged;
• improved whistleblowing protection for company employees;
• new Competition and Markets Authority, bringing together the competition functions of the Office of Fair Trading and the Competition Commission; strengthened legal basis for the UK Green Investment Bank;
• implementing ideas collected via the Red Tape Challenge;
• modernise the UK’s copyright regime while strengthening copyright protections. New possibility to license orphan works; new system for extended collective licensing of copyright works;
• improve consumer protection: right to view and download the data businesses hold on them in an electronic format;
• simplify regulation through reduced inspection burdens; repeal unnecessary laws and time-limit new laws so that there are only ever relevant and necessary laws in place and extend the Primary Authority Scheme to provide consistent regulatory advice to thousands more small firms.

See the Gov site for details.

European small business against exemptions

A difficult topic for us Smart Regulation experts is how widely should we use exemptions to ensure the best possible effects to regulation. That is the question posed by the European Commission's proposals in November 2011 to alleviate the regulatory burden on SMEs, and already discussed on this blog, when the ACCA (Chartered Accountants) published its position paper recommending that ""Smart regulators must be able to tell regulatory burdens from regulatory capital."
Now the European Association of Craft, Small and Medium-sized Enterprises (EUAPME), a leading stakeholder organisation in Brussels, has also come out against the EC policy, explaining in a Position Paper issued 27 January why "exempting micro enterprises from EU legislation is not an option." While they welcome the recognition that compliance with regulation is more burdensome for small companies, UEAPME believe that "Standards and regulations which are related to the quality aspects of enterprises, their products and their services must also be respected by smaller enterprises, if they want to be successful and remain competitive on the market, even locally."

How to simplify company law (UK)

A stakeholder consultation, with a company law and commercial law focus, is launched today by the UK Red Tape Challenge. D. Trnka comments that this new approach can be seen as "an interesting example of how social networks can be used for crowd-sourcing efforts to improve regulatory framework" and is therefore quite worth checking out. Quote from press release "Companies of all shapes and sizes have today been asked for their views on how to tackle unnecessary bureaucracy in company and commercial law.

For the next three weeks, the latest phase of the Red Tape Challenge will focus on more than 120 company law regulations, guidance and enforcement processes that businesses deal with on a daily basis.

The campaign asks for a variety of suggestions about how regulations can be improved, simplified or abolished, whilst maintaining a company law framework that gives companies the flexibility to compete and develop effectively.

Examples of areas open for comment include:

• Internal workings of companies and partnerships: Rules on shares and share capital, requirement to hold information at business premises and rules on meetings and resolutions.
• Accounts and returns: The content, form and auditing requirements of financial accounts and other reports.
• Business names: The rules covering company names.
• Disclosure of company information: The regulations covering the information companies must supply to the official register."

See also new group on LinkedIn

Accountants criticise EC plan for SMEs

Friend of the network Manos draws our attention to his organisation's reaction (published today on Euractiv) to the recent report by the Commission on relief from EU law for SMEs (23 November). Under the title "Smart regulators must be able to tell regulatory burdens from regulatory capital," the Association of Chartered Certified Accountants (ACCA) points out that the Commission's inititatives on exempting small businesses from individual regulations risk misinterpreting the needs of SMEs and introducing "two-tier markets". This viewpoint is based on the newish concept that regulation does not only impose costs (which when not justified are called burdens): "some regulations, including those governing financial disclosures, "are more like public investment in that they build capital – trust, standards and confidence – which private firms can then leverage to create value." Exemptions from these specific rules would not be economically stimulating. For discussion.