How much 'red tape' has the government cut?

"This is the first government in modern history to reduce overall domestic regulation for business while in office. 800 regulations have already been abolished or simplified."
Department for Business, Innovation and Skills, 27 January 2014

"Employees used to be able to sue their employer if they were insulted by a customer. We've changed the Equality Act to stop that."
David Cameron, 27 January 2014

Shadow Chancellor Ed Balls' announcement that a Labour government would re-introduce the 50p tax rate sparked accusations that the policy was 'anti-business', and the Prime Minister picked up the theme today when he addressed the Federation of Small Businesses.

Mr Cameron told his audience that his government had "slashed needless regulation" that he claimed was holding back business growth.

800 regulations already cut or simplified?

According to the Prime Minister, 800 pieces of 'red tape' had already been either removed from the statute book or made simpler, a claim echoed later in a Business Department (BIS) press release.

While neither Downing Street nor BIS were able to confirm to us the source of this statistic, it seems to be drawn from figures collected by the Cabinet Office's Red Tape Challenge, a government initiative to 'crowd-source' suggestions from businesses for regulations that could be cut or simplified.

According to its latest progress report, 806 regulations had been cut or simplified as at January 2014, while a further 2,289 regulations have been earmarked for simplification or scrapping, but hadn't yet been acted upon.

While the figures don't tell us how many of the 806 have been scrapped and how many have been amended, we do know that around 37% of all those in the pipeline to be scrapped or simplified were to be removed altogether, with the remaining 63% due to 'simplified'. The medical world has seen the largest reduction in 'red tape', accounting for over a quarter of all the changes carried out so far.

While this data does support the Prime Minister's claim, it does have a couple of caveats. The first is that not all of the changes have yet been verified by the Regulatory Policy Committee, the independent body set up by ministers to audit the changes to regulation proposed by government.

Secondly, the figures also show that not all of the regulatory reforms introduced by the government necessarily have "material benefit" (where "the reform has an impact for business/civil society, individuals or the taxpayer and that is over and above tidying the statute book.") Only 44% of all the regulatory changes identified by the Red Tape Challenge are considered to have a "material benefit".

Sue your boss for insulting customers?

To illustrate some of the "crazy" regulations that the government claims to have cut, the Prime Minister pointed to the example of staff members being able to sue their employers if they happened to be insulted by a customer.

Downing Street confirmed to us that the regulation in question came from the Equalities Act 2010, which was amended by the Enterprise and Regulatory Reform Act 2013.

However the Prime Minister might not be giving the full picture about the extent to which this regulation left businesses open to litigation from their employees.

The guidance produced by the Equalities and Human Rights Commission to help employers comply with the regulation shows that it took more than just an offended worker for a case to be taken to court.

First, the employee has to have been "harassed" on at least two separate occassions, and has to have raised the issue with the employer. Even then, the employer is only legally liable if it hasn't taken "reasonably practical steps to prevent harassment by a third party happening again."

These practical steps can include: having a policy on harassment; notifying third parties that harassment of employees is unlawful and will not be tolerated, for example by the display of a public notice; and encouraging employees to report any acts of harassment.

A Downing Street spokesperson told us that regardless of the circumstances in which this sort of legal action could arise, it was "important to negate the possibility that employers could be sued like this."

Conclusion

The numbers behind the Prime Minister's 'red tape'-cutting claim seem to be accurate, although it is worth noting that not all of these regulatory changes will necessarily have saved businesses money. However Mr Cameron is perhaps over-simplifying the circumstances in which employees could take legal action against their employers, as this regulation required a more specific set of criteria to be met before the matter would be dealt with by the courts.