IBEC warns of cost burden from regulation

The Government must move immediately to introduce full analysis of the burden imposed on business by new rules and regulations, according to IBEC, the business lobby group, writes Cliff Taylor, Economics Editor

Regulation was now imposing very significant costs on business and the Government was not taking enough account of the impact of a variety of new rules.

A commitment in a White Paper last year to introduce regulatory impact analysis on significant new measures had not yet been introduced, even on a pilot basis, according to Mr Ciarán Fitzgerald, IBEC's director of trade policy, speaking at a briefing yesterday.

This means there was no rigorous assessment of the cost impact of major pieces of legislation, such as the recent auditing and accounting bill.

IBEC also feels there is no overview from Government of the combined impact of the wide range of new regulations on industry, which cover areas from environmental rules to corporate governance and auditing to health and safety and others.

Business will be closely watching for any indication from the Taoiseach, Mr Ahern, on the introduction of regulatory impact analysis when he addresses an IBEC conference on regulation in Dublin on Monday.

As part of the new national agreement, Sustaining Progress, the Government committed to introduce this analysis on a pilot basis from last year. A Government White Paper, Regulating Better, published in January repeated this commitment.

IBEC sees this analysis as a key tool towards assessing the wider costs and benefits for new regulations to judge whether they are appropriate and, if so, help to set up a timetable for introduction.

If this does not happen, Mr Fitzgerald warns that it will further undermine competitiveness, at a time when exporters' margins are being squeezed by higher costs, static prices on world markets and adverse currency trends over the past year, which have sharply hit euro receipts.

Business are being "told to be compliant and told to be cheaper - they can't do both".

The higher costs from regulation cannot be recovered from customers, he warned and would have an adverse impact on future investment decisions. This is particularly important with increasingly strong competition for new foreign direct investment, he added.