A radical shift in Scotland's approach to regulation, which for the first time puts the onus on bureaucrats to come out of their offices and engage directly with business, points the way forward for the UK and Europe, according to campaigners against business red tape.
The "progressive" approach proposed in a new report by the Regulatory Review Group, which brings together Scottish government officials and business representatives, has been favourably compared to the best examples on continental Europe by the London-based Centre for European Reform.
Entitled Towards Better Regulation for Scotland, the report proposes that civil servants should visit between six and 12 companies of varying sizes to tell them "what the legislation will do and what that will mean to them (this will include form filling) and with each business work out the impact and cost to the business both in monetary and other terms".
Professor Russel Griggs of CBI Scotland who chairs the Regulatory Review Group said the proposed new approach to creating, managing and monitoring regulation would "remove the fence" between regulators and regulated.
"Our task, which is supported by the enterprise minister Jim Mather, is to give Scotland a competitive advantage by making us better than anywhere else on the regulation of business," he said.
The report also recommends requiring business as well as officials to give up time to enhance mutual understanding, and is based on the principle that regulation is often requested and required by business itself.
"The partnership we are proposing will be a bit of a culture shock for some officials," said Griggs. "It will also require that business doesn't just sit on the sidelines and complain about civil servants."
One other key proposal in the report is simplifying andshortening the "long and unwieldy" regulatory impact assessments that officials are already required to complete, but which so far are neither obligatory nor consistently applied.
"Our view is that regulation is a product of government and, as with any product, you first of all have to figure out whether the market wants it. You have to test it in the market and you have to do good advertising and promotion to make sure that the product it is understood."
SIMON Tilford, chief economist of the Centre for European Reform, which monitors the impact of regulation by Brussels, called the initiative "thoughtful and intelligent".
He added: "The Scottish group is proposing is what all governments should be committed to doing but very few of them are, with the exception of the Netherlands and perhaps Germany.
"It can be damaging if regulation is made in response to lobbying and special pleading by individual sectors - for example, the US car industry lost out to Europe and Japan by resisting emissions-related restrictions.
"But if the balance is right then what is proposed in Scotland is a very progressive response. What is possible in Scotland, is obviously not going to be possible at Europe-wide level but in general if other countries, including the UK looked at doing something similar to what is being proposed here, that would be good."
Fergal O'Brien of the Dublin-based Irish Business and Employers Confederation (IBEC) said: "Our experience with regulatory impact assessments to date has been that, while in principle we support them, they have been poorly rolled out and the process has lacked openness and transparency.
"The Scottish initiative of piloting them directly with a number of companies looks a very positive development and a really good step in the right direction in order to reduce the regulatory burden on business."
Niall Stuart, press and government officer of the Scottish Council for Development and Industry (SCDI), which is part of the group, said: "People talk about evidence-based policy, but until now the assessment of costs and benefits of new legislation passing through Holyrood has simply not been adequate.
"People drafting up new laws have been guessing at their impact as they have not been required to get out and speak to businesses and other organisations about how they will be affected.
"This new process should ensure that civil servants have a clearer idea about how businesses and employees will be affected by new regulations, and flush out any unintended consequences of bills before they are passed.
"This puts us ahead of much of the work being done by Westminster on better regulation."
Jim Mather, the enterprise minister, said: "Experience tells us that better regulation leads to better government and more sustainable growth. As a minority government we do not rush to legislation or regulation and we have to reach out and work with parliament, and with business, to build support and help us avoid adverse unintended consequences."
The regulatory review group, whose final report to ministers is expected in June, also includes representatives of the Institute of Chartered Accountants of Scotland, the STUC, the Office of Fair Trading, the Federation of Small Business, the Scottish Consumer Council and the National Farmers' Union Scotland.
