Chancellor: Will use EU presidency to push for economic reform

The chancellor has promised businesses a "culture change" in the government's approach to business regulation.

Gordon Brown told the CBI's annual dinner last night that Labour would adopt a "more humble" approach over regulation in its third term.

He told his audience of business leaders that there must be a "new model" for business regulation that puts the focus on "no inspection without justification".

Brown added there had been "so many false starts" by governments seeking to cut red tape, but insisted Labour was now seeking "a new relationship with business".

The chancellor said in "the old model" of regulation the "implicit regulatory principle from health and safety to taxation has been 100 per cent inspection of premises, procedures and practices irrespective of known risks or past results".

New model

"The new model must be quite different," he argued. "The breakthrough is moving to a risk based approach - no inspection without justification, no form filling without justification and no information requirements without justification. And thus instead of an implicit threat of 100 per cent inspection, limited only by resources, inspection where there is risk: not just a light touch but a limited touch.

"Because there have been so many false starts in tackling regulation, I want to emphasise the different principle underlying our approach so that business leaders here will come to accept the liberalising nature of what I am suggesting - a new relationship with business which recognises your role as wealth creators in your communities.

"And so I propose not simply a new approach to regulation but to build a new trust between business and government founded on the responsible company, the educated consumer and government more humble because it is well aware of its limitations - now concentrating its energies on dealing not with every trader but dealing with the rogue trader, the bad trader who should not be allowed to undercut the good.

"Shortly I will set out the detail of our changes based on Philip Hampton's review. The government will legislate as announced in today's Queen's Speech. And we will start with one million less inspections, 29 enforcement and inspection bodies abolished or merged, and at least a 25 per cent reduction in form filling. With enforcement based on early warning before prosecution to allow companies to correct problems and allow government to reduce costs.

"And to make sure this agenda happens - an agenda that let's be honest with ourselves does require a culture change in government - our programme of reform will be led by recruiting from the private sector."

Europe

Brown also promised that Britain would use its forthcoming presidency of the EU to promote economic reform.

"In our coming presidency of the European Union we will seek to bring all political parties together to work in unison for economic reform in Europe," he said.

"Our proposed agenda will be: labour market reform, so we will resist the opt-out being removed to the 48-hour week; regulatory reform; product and capital market reform, so you have access to European markets; and liberalisation of the single market, the greatest single market in the world.

"And it is around pro-economic reform, pro-global Europe policies that perhaps the first truly national consensus on Europe can develop.

"To help build that consensus I will ask the European committee chaired by Barry Sheerman MP - which we have set up as an all party advisory committee - to discuss and report to me on whether a consensus across parties can be agreed on European economic reform issues.

"We will also use our EU presidency to push forward a stronger transatlantic trade and investment partnership to remove regulatory and other barriers between the European Union and the USA."