Government insists it is cutting red tape for business

The Business Secretary has insisted the government is making it easier for businesses by reducing red tape.

Peter Kyle defended Labour’s approach to business, telling the BBC it will implement changes in a way that is “pro-worker and pro-business”.

Ahead of next month’s Budget, Chancellor Rachel Reeves is launching a “crackdown on needless form-filling” for businesses at the first-ever Regional Investment Summit in Birmingham.

The government has been criticised by firms who say increased employers’ National Insurance contributions and the Employment Rights Bill add to the burdens facing businesses.

The Chancellor will say at the Birmingham summit on Tuesday that the changes will save firms almost £6bn a year.

New, “simpler corporate rules” will remove requirements for small businesses to submit lengthy reports to Companies House, the Treasury said.

The changes will apply to over 100,000 firms such as family-run cafes.

The measures could include temporary exemptions for new AI software from regulation, Kyle told BBC Radio 4’s Today programme.

“In certain circumstances when new AI technology is being developed, we can remove it from all regulation for a period of time to give it the space to really grow, to develop, to be commercialised really rapidly,” he said.

This, he said, would enable the tech to be used “to benefit the health, the wealth, the education of our nations”.

“We’ll use that in a very targeted, a very safe way.”

The government has pledged to reduce the administrative cost of regulation by a quarter by the end of this Parliament.

Kyle said the previous government “did not do enough on deregulation” despite pledging to do so, particularly after Brexit.

“If you look at some of the reporting that needs to be done by directors, for example, directors’ reports to Companies House, I’m eliminating a great deal of that today because some of it is just so unnecessary,” he said.

But pushed on whether the government’s changes to employment rights would add costs to businesses, Kyle insisted that the changes would be fair for both employers and employees.

“We are making sure that the rights and responsibilities that people have in the workplace as employers and as employees [are] right for the age we’re living in.”

Jane Gratton, the deputy director of public policy at the British Chambers of Commerce, said the plans will be welcomed by businesses.

“The burden of unnecessary red tape and bureaucracy ramps up their costs and damages competitiveness,” she said.

But the Liberal Democrats’ Deputy leader Daisy Cooper said that if the government wants to reduce red tape they should pursue an EU-UK customs union.

“If the Chancellor was serious about cutting red tape she would tackle the mind-blowing two billion extra pieces of business paperwork created by Brexit by pursuing an ambitious tailor-made UK-EU customs union,” she said.