The dangers of the Red Tape Challenge

Let me start by saying that no one in his or her right mind would argue that reducing unnecessary bureaucracy and administration is not a good thing. Too much time and effort is wasted in our regulatory framework and by addressing this we can not only reduce costs but also free up resources, which can be used to deliver growth.

We must take care however and ensure that, in doing so, we are not opening ourselves up to some unintended and potentially serious consequences.

One of the most obvious risks comes from attempts to draw a clear line between qualification or exclusion from a specific obligation, be it administrative, regulatory or financial. A good example is the current discussion around the minimum level at which businesses should be required to register as WEEE producers. In this situation, the administrative burden for those qualifying is exactly the same whether you are producing 1kg or 1,000,000 kg.

The result is often a feeling of being hard done by and this results in a strong incentive for the less scrupulous to avoid joining the scheme altogether – the complete reverse of what we are trying to achieve. A scaled system, in a similar vein to car tax for example, would no doubt be perceived as fairer and would encourage those who had previously been outside the scheme to participate.

Audit trail

We must remember that, when the Hazardous Waste Regulations were introduced in 2005 and the qualification level was shifted from 200 to 500 kg, somewhere in the region of 100,000 companies went off the radar. We didnt lose the activity or the waste; we simply lost the audit trail and the ability to understand it and monitor how the waste was managed.

The hazardous waste example is perhaps even starker when you remember that registration cost only 18. At the stroke of a pen 100,000 hazardous waste producers are out of sight; their collective impact on the environment beyond measure and the integrity of the whole system of control at risk.

To take this a step further, it is not difficult to imagine a scenario where a significant number of the UKs processors are inadvertently or intentionally breaking the law. If we are asked by a customer to manage 300 kg of hazardous waste on their behalf, it is quite conceivable that they may also be asking another supplier to do exactly the same. This would only be visible to the EA if both companies were registered and there is no reason why either supplier would know of the others existence. The waste management company and the waste producer could find themselves unwittingly breaking the law.

If a clear line is the right way to go, then we should take great care about how and where we draw it. It is possible for this system to work. Take the VAT threshold for example: this has been carefully calculated and accepted. More importantly, the accounts are audited by a third party or directly by the tax authorities. Introducing a de minimis level for environmental impact would be like saying to car owners, you dont need to tax your car if you do less than 1,000 miles per year. The benefits of reduced administration must not be outweighed by the potential impact of reduced information and understanding of those operating outside of the scheme.

Registration

We must also work harder to ensure that ignorance is not a barrier to registration when it comes to the new WEEE Regulations. We must work harder as a sector, with BIS and the EA, on sustained communication and awareness. This is something we have not done in relation to the Hazardous Waste Regs and as a result, there are still a significant number of producers who sit outside the system.

Another side effect of efforts to reduce the burden of administration is the inconsistency we are now starting to see in the application of Regulation. In the previous examples of hazardous waste and WEEE, we have seen de-minimis levels set for material. This is not the case for Used Cooking Oil (UCO) producers. UCO producers are all required to register to provide a fully auditable trail and to ensure that UCO does not find its way back in to the human food chain. Whilst we would all agree that this is right, it is also hard to understand why the perceived risks of this outweigh the risks presented by the mistreatment of hazardous waste.

Finally, I believe that there is one area of real potential for the Red Tape Challenge which is often overlooked – the issue of enforcement. In my experience, the issue is often not with the regulation itself but how it is policed. Regulators must be guided and empowered to act in the spirit of the law and not be forced to solely implement the letter of it. This approach will meet the aims of the Red Tape Challenge and address the bureaucratic burden, without the need for expensive and time consuming consultation and legislation.