Haskins ready to battle red tape for three more years

Christopher Haskins, the Northern Foods chairman appointed by Tony Blair to weed out superfluous business regulations, tells Business Europe why tensions over red tape are running so high, and explains what needs to be done about it.

In September 1997, Tony Blair managed to allay the business community's fears of excessive interventionism under the new Labour government by setting up the Better Regulation Taskforce, a panel charged with screening business legislation so as to weed out superfluous or badly designed laws that hinder rather than help small companies.

He appointed Northern Foods chief executive Chris Haskins, one of relatively few business heavyweights who had consistently supported the Labour party during its wilderness years, to chair the taskforce. Haskins, who was awarded a peerage two years ago, has just been re-appointed for a second three-year term.

Since 1997, Haskins and his taskforce colleagues have had a busy time of it. They have conducted exhaustive surveys of how business regulations affect many commercial sectors, and have scored some high-profile successes. Last year, the panel persuaded the government to fund the new Food Standards Agency from central government funds rather than through a proposed extra levy on restaurants and other food outlets. It also pushed the government into launching a far-reaching reform of the UK's licensing laws, described in the taskforce's second annual report as anachronistic.

It may seem strange, then, that tensions over excessive regulation are currently riding higher than ever. Although most business leaders give Blair credit for managing the economy well, resentment over proliferating employment legislation counts heavily against him.

Haskins agrees that Blair's government is responsible for a sharp increase in labour market legislation, which employers are very sensitive to. As he points out, his taskforce concluded in its last annual report that some sectors, notably hotels and catering, are now groaning under the weight of excessive regulation.

Haskins sees this as part of a trend in all industrialised economies, although he stresses that studies by the Organisation for Economic Co-operation and Development consistently show that the UK remains less regulated than most OECD members. Regulation is a fact of life in Western democracies he says.

He argues that in this environment, calls for a red tape bonfire, epitomised by Conservative leader William Hague's recent pledge to sack trade and industry ministers if they don't achieve a demonstrable reduction in business legislation, are unrealistic. His role, he says, is to improve the quality of legislation, and reduce it where possible.

However, primary responsibility for making business legislation more efficient and workable lies with the civil servants and politicians who design it, Haskins argues. That task cannot be performed solely by the Better Regulation Taskforce, which operates downstream from the source of legislation. But streamlining business regulation in this way requires genuine commitment from politicians, most of whom are content to rely on inadequate impact assessment procedures.

You simply can't rely on impact assessment. Most of the economic tests they use are very difficult to apply to the real world. All politicans should test their policies, but that approach is for the moment an aspiration in party manifestos,Haskins says.

In view of the increasing influence of European Union legislation, Haskins also favours tightening up EU decision-making procedures. One improvement he suggests is for national governments to exercise tighter control over their ministers, who often go beyond the strict terms of their brief when giving proposed legislation their final seal of approval in the EU Council of Ministers.

Ministers need to be controlled a lot more. I also feel that we could do with a few more checks and balances in the European Parliament, he said.

Back in the UK, he supports calls from business organisations for the government to compensate companies for administering taxes and transfers through the payroll. Haskins has raised the issue personally with Chancellor Gordon Brown, who, he says, is not as keen on the idea as I am. However, the government is, he reports, digesting the idea.

He also backs the government's drive to increase internet access among small companies, arguing that there is scope for reducing operating and procurement costs by doing business online. This is especially true of small to medium-sized companies, which are are always at a disadvantage when it comes to regulations,he says.

During the next three years, the Better Regulation Taskforce plans to conduct surveys on how business legislation impacts on small shops and farmers. It will also produce reports on ways of boosting labour market flexibility, and on how to harness the full potential of e-commerce. An investigation of the impact of housing benefit legislation is planned for next year.

Although Haskins plans to step down as the chairman of the taskforce at the end of his current term, he is clearly glad to have been given the task of challenging ill-thought out business regulations for another three years.

The Task Force, unlike the department of trade and industry, is independent. We prosper because the Prime Minister supports us, but I bet a lot of departments wish we weren't there, he says.