Kennedy Champions Independent Centre For Regulatory Assessment

12.00.00am UTC (GMT +0000) Tue 13th Jan 2004

Charles Kennedy

Charles Kennedy, Leader of the Liberal Democrats, today addressed a Liberal Democrat Business Forum event in the City, hosted by the Institute of Chartered Accountants in England and Wales (ICAEW).

In his keynote address, Charles Kennedy said: "The Liberal Democrat agenda for business includes simplifying the tax system for business and individuals such as abolishing many of the costly and ineffective loopholes and reliefs introduced by Gordon Brown. Our research suggests that around £2bn of annual tax reliefs go unmonitored by the Treasury. They have no idea how effective they have been in achieving the goal they set out to achieve."

"We are also aim to identify and cut back the regulations that retard business growth and put an undue burden on stretched businesses."

"Under Gordon Brown's stewardship, the tax system has become so arcane and complex, that the Tolley's tax bible for accountants has had to grow by almost 1000 pages."

He counselled against both over and under regulation:

"There are of course grounds for some regulation. There are times when the environment or consumers or competition need to be protected. But a great deal of regulation does more harm than good. It ends up costing society more than the failure which it is designed to correct and can attack competition rather than foster it."

"Most regulations in isolation always seem highly plausible on their own right, but it is the when added together, the burden that is becoming a serious problem, especially for small businesses."

He stressed the need for appropriate regulation, especially in regards to small businesses:

"Where large companies can employ legal and HR departments, the directors and financial controllers of small companies are in a DIY situation. The result is that the burden of employment regulation costs a large company £5 per employee a year. For small companies it can rise to £288 per employee."

"We should always ask whether a regulation is efficient and appropriate. We have suggested the creation of an independent centre for regulatory assessment, also called for by the Institute of Chartered Accountants. At the moment, it is the Government which assesses its own regulations. It is judge and jury in its own cause. An independent centre would be far tougher in questioning whether the regulation in question was really necessary and whether its aims could not be better achieved by the market."