With the Autumn Budget looming, Rachel Reeves appears keen to curry favour with business as ministers prepare a package of measures that may include tax rises.
One way she hopes to achieve this is by cutting red tape in a blitz on the bureaucracy she says holds firms back.
As a business owner, it is worth understanding what might be pared back and what you should do now to protect profitability and compliance.
What red tape is likely to go?
The Chancellor has talked about removing pointless paperwork and unnecessary form-filling that tie up time for small firms.
Specifically, the business blitz includes:
- Increasing size thresholds for corporate reporting and cutting duplicative requirements, meaning lighter-touch requirements for up to 44,000 medium-sized private companies and around 7,000 subsidiary companies, who will no longer be required to produce Strategic Reports.
- Removing the need for any company to submit a Directors’ Report to Companies House.
- Digital verification of planning documents, speeding up approvals for local projects.
- An online register of underground pipes and cables to prevent length and unnecessary delays caused by accidents.
- Less frequent data returns for thousands of banks, insurers and asset managers, with the Financial Conduct Authority scrapping lower-value returns and the Prudential Regulation Authority cutting the number of times firms need to update financial reports.
Another area currently under consideration is Mergers and Acquisitions (M&A).
The proposal is to streamline the M&A review process by introducing more regular market-remedy reviews and replacing the Competition and Markets Authority’s (CMA) current panel decision-making model with an internal board-committee approach.
This will move many of the decisions away from independent panels and onto in-house work for the CMA.
Those changes would be significant and cannot be imposed by ministers without further work, as they will require consultation and primary legislation.
If a public consultation is launched, we will let you know so you can see the details and, if you wish, contribute your views.
Could cutting red tape actually help businesses?
Ideally, there will be some increased growth as a result of the planned changes.
Removing burdensome bureaucracy can speed up decision-making, reduce compliance costs and free managers to focus on growth.
If the right forms are scrapped and better processes are introduced, the net effect could be a smoother regulatory environment and quicker routes to market.
However, the practical outcome depends entirely on how the replacements function and the outcomes of any consultation.
There is a danger that in the rush to simplify how businesses are managed, useful safeguards get removed.
We recently saw the unintended consequences that can follow the scrapping of oversight.
The upheaval among some local councils following the overhaul of the audit regime is a clear warning that reckless cuts stifle growth rather than facilitate it.
Poorly targeted cuts can leave organisations without the oversight needed to manage risk and thus cannot succeed in the long term.
We would recommend seeking expert professional support to ensure that your business can thrive regardless of the changes that may be coming.
If you are worried about governance, controls or how to adapt processes to a changing regulatory environment, our team is happy to help.
We can encourage best practice even in instances where regulation allows a more lax approach.
Cutting red tape should free businesses to grow, but there is always a risk to vital protections.
The best outcome will be smarter rules that allow businesses to succeed rather than get weighed down with administrative tasks.