Environmental standards 'good' for growth

18th July 2011


Reducing "red tape" must not be at the expense of the vital role regulation plays in correcting market failures, promoting fairness and protecting the environment, says the Aldersgate Group in a new report, which argues that effective regulation is essential to economic growth.

“Effective green laws create a level playing field which drives efficiency, early action and the innovation in UK companies that will be the engine for future growth and jobs,” claims the group’s chair, Peter Young.

The government is currently asking for views on all 278 existing environmental regulations as part of its Red Tape Challenge, before deciding which should stay, be merged or scrapped.

But the Aldersgate Group, which consists of some of the UK’s largest companies and environmental bodies, including IEMA, says the deregulation initiative threatens to lock in polluting industrial processes for decades to come, jeopardising future competitiveness and damaging the UK’s attractiveness for green investment.

“A crude deregulation drive risks damaging competitiveness and severely threatens the prime minister’s commitment to a green industrial revolution,” says Young. “The regulatory framework should encourage a rapid shift to a sustainable economy rather than being held back by vested interests or the lowest common denominator.”

Speaking at the launch of the report, which examines how regulation can help to reduce the UK’s environmental and financial debts, climate change minister Greg Barker said he accepts that regulation is necessary to protect the environment, but believes some existing legislation is outdated and in need of reform, and this can be achieved without risking environmental protection.

The Aldersgate Group agrees that by streamlining legislation and adopting a smarter approach to implementation, it is possible to achieve “greener” outcomes and reduce administrative burdens. It recommends adopting a “best value” approach to regulation, which seeks to protect essential economic, social and environmental objectives at the least cost.

Meanwhile, the government is calling on businesses and inspectors to “blow the whistle” on inconsistent and over-zealous enforcement of rules and regulations. It wants people to use their experience of different regulators and say where tickbox regulation, multiple inspections and conflicting advice is getting in the way, harming their business and preventing economic growth.

A survey of UK manufacturers by insurance firm Zurich reports that the regulatory environment remains a significant barrier to growth, with 20% of firms claiming that red tape is a key factor holding back their expansion.


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