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Hague: Common Sense on Regulation campaign

Today I want to tell you how the next Conservative Government will set business free from the stifling burden of red tape and regulations that have been imposed by Labour over the past four years.

I want to show how the next Conservative Government will be on the side of hard working businessmen and women.

I want to set out how the next Conservative Government will be the champion of enterprise and innovation, and how we will help to make Britain the best place in the world to do business.

Thanks to the Conservative reforms of the 1980s and 1990s, the Labour Government inherited a flexible and dynamic economy with relatively low taxes and light regulations. Yet instead of continuing with these policies, everything Labour have done in the past four years has taken us in the opposite direction. They have lived off the Conservative inheritance at the same time as undermining our future competitiveness and prosperity with their extra taxes and increased regulations.

Before the last election Labour promised in their Business Manifesto that they would not "impose burdensome regulations on business because we understand that successful businesses need to keep costs down".

As in virtually every other area of policy it has been a case of saying one thing and doing another. They have all spin and no delivery.

The Labour Government have not been content with hikes in business taxes to the tune of £5 billion a year, or setting a course for public spending that means taxes will be forced up again.

On top of that, the regulatory burden is rising just as fast. The British Chambers of Commerce, using the Government's own cost compliance assessment have shown the total extra regulatory burden at £10 billion over the course of this Parliament. And, contrary to what Stephen Byers said yesterday, that does not include the financial cost of the national minimum wage.

As every person running a business knows, it isn't one single piece of red tape, or one directive from Whitehall, but the sheer volume of red tape that threatens to strangle the life out of so many firms. It's things like the Working Time Directive, statutory trade union recognition or forcing businesses to administer the Working Families Tax Credit. And the burden falls disproportionately on small businesses, the innovators and risk takers on whose success our future prosperity depends.

Everywhere I go throughout Britain the story from businesses is the same. They are simply sick to death with the endless form filling and mountains of Government imposed paperwork that prevents them from getting on with what they do best - running their business and creating wealth.

They have had enough of Government Ministers that have literally no idea what it's like to sit up night after night to complete complicated VAT returns or the daily struggle of the businessman who said to me "at this rate we are going to have one man working in this country and 55 million checking up on him".

Across the world, countries are waking up to the fact that in the global economy, success will be based on low taxes and light regulations. But under Labour, Britain is swimming against the global tide.

We had independent confirmation of this last week when that bible of American business, Forbes, calculated that Labour are introducing ten new pieces of red tape a day. As they so accurately summed it up, Tony Blair has been "quietly loading the British economy down with new taxes and regulations that threaten to erode the advantages of doing business in Britain".

It is hardly surprising that they branded Tony Blair, "Red Tape Tony" and Britain today as "Labour's Red Tape Factory".

So I am particularly delighted this morning to be launching a new web site "sillyregs.com" that has been developed by Sir Paul Judge, Chairman of our De-regulation task force. While the name might be light hearted it carries a deadly serious message. I might not agree with everything that is said on the website - but I very much agree with its objectives. This website will give news about new regulations, and give business people everywhere the chance to comment publicly on them, particularly those that are burdensome and excessive. Businesses will be able to send in private e-mails that the task force will then follow up.

The depressing truth, that this initiative will clearly expose, is that despite the spin Labour's instincts to interfere and to regulate remain as strong as ever.

By contrast the next Conservative Government will set business free by introducing a common sense revolution on red tape and regulations. Not only will the next Conservative Government be a tax cutting government, but we will be a regulation slashing government too. We will lift the suffocating burden of regulation and allow business to breathe again.

That is why the next Conservative Government will be committed not just to stemming the ever-increasing number of regulations, but to be the first government in history actually to cut the overall burden of regulations.

Under a Conservative Government there will be fewer, better and simpler regulations.

We have already made a start by announcing a number of ways in which we would set about achieving that commitment.

As a priority, the next Conservative Government will establish an independent audit of all existing Government regulations. Then we will set declining regulatory budgets for each Government Department which will bring down the cost of regulations year on year.

In addition we will introduce so-called sunset clauses into regulations so that wherever appropriate they are automatically reviewed or dropped after a specific period. Where new regulations are necessary we will try to soften their impact through the introduction of longer lead in times that so that businesses have longer to familiarise themselves with any new requirements. And through exemptions we will remove some burdens altogether from small businesses that are least able to bear the cost.

We have also identified specific burdens that a Conservative Government would lift. For example, we will pay the Working Families Tax Credit as a benefit at a saving to business of £100 million a year. Last week, David Heathcoat-Amory pledged that we will abolish the infamous IR35, Labour's stealth tax on IT entrepreneurs.

All of this has been widely welcomed by business. This morning I wish to go further about our plans, by announcing two specific new policies that will give more teeth to our proposals.

We will replace the existing Better Regulation Task Force that has clearly failed to stem the regulatory tide. Instead we will establish an independent Deregulation Commission with significantly increased status and powers.

The new Commission will independently assess the costs and benefits of all proposed regulations before they are introduced. We will ensure that it has the power to block any proposals, from any Government Department, that do not meet pass its published criteria on such areas as necessity, proportionality, effectiveness and affordability. Any such proposal would be referred back publicly to the Department concerned and if the Department insisted on regulating without amendment it would have to be endorsed by Parliament.

At the moment, there is insufficient Parliamentary scrutiny of new regulations. Just as there is a House of Lords Committee to scrutinise European legislation so we would establish a permanent, dedicated Lords Committee properly to scrutinise new regulations. This would build on the valuable work already done by the Lords Delegated Powers and Deregulation Committee. It would be able to draw upon the wealth of business experience found in the Lords. And it would strengthen the accountability of the Government to Parliament.

I recognise the concerns of those who say to me that this is all well and good but we have heard it all before, that every government says it will cut regulations but then goes on to increase them. I appreciate the fears of those who believe that as soon as we are returned to power, our proposals will be diluted or completely smothered by the Whitehall machine.

So I want to make this absolutely clear. As Prime Minister, I will make deregulation one of my top priorities. I will drive deregulation from the centre. And I will promote Ministers not on the basis of whether they regulate enough but on the basis of how much they deregulate.

Deregulation, along with lower business taxes, is central to the Conservative view of a dynamic, modern economy that can compete globally. We believe it makes common sense, at a time when our competitors are cutting taxes, to make sure that our taxes are lower still. We believe it makes common sense, when our competitors our easing the burden of regulations, to have fewer regulations of our own.

So at the coming election there will be clear choice for business.

It will be between a Labour Government that will go on taxing and regulating, or a Conservative Government that will cut taxes and slash red tape.

It will be between a Labour Government that sees business primarily in terms of rich pickings for the Treasury and a Conservative Government that wants businesses to keep more of what they earn.

It will be between a Labour Government will continue to pile on stealth tax after stealth tax, regulation after regulation or a Conservative Government that offers common sense on taxation and regulation and will set business free.

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