Regulation of Business

Michael Fallon Excerpts

Monday 19th November 2012 Written Statements

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

I would like to inform the House that I am announcing today a doubling of the rate at which Whitehall Departments must cut the burdens their regulation places on business.

The Government are dedicated to enabling businesses to grow and create jobs, helping Britain compete globally. To achieve this, we must remove any unnecessary regulatory burdens that hold back growth and stifle enterprise.

Since January 2011, Whitehall Departments have been expected to avoid increases in regulation, under “one-in, one-out”. This ambition has not only been met but exceeded, reducing net costs on business by around £850 million. It has worked alongside the red tape challenge, which will identify 3,000 regulations to be scrapped or reduced, and the focus on enforcement initiative which is examining where inappropriate or excessive enforcement of regulation needs to be addressed. But even more is needed to remove red tape from business.

From January 2013, the current “one-in, one-out” constraint has required Government Departments to balance the costs of new regulation with deregulation that creates equivalent savings for business. This will be replaced with a “one-in, two-out” rule that whenever a regulation creates costs, twice as much saving must be found by scrapping or simplifying regulation. As under “one-in, one-out”, all cost and benefit calculations under “one-in, two-out” will continue to be validated by the independent Regulatory Policy Committee to ensure the credibility and robustness of the system.

“One-in, two-out” will be a new system, and Departments will not be able to use previous achievements to compensate for regulation introduced in the second half of the Parliament. This means that every Department, including those with good records to date, will have an even tougher constraint on new regulation. Additionally, the few Departments which have not met “one-in, one-out” to date will have to use the second half of the Parliament to make up lost ground. By the end of the Parliament, they will be expected both to have achieved “one-in, two-out” from January 2013 and to have introduced enough deregulation to balance out the cost of any regulation they introduced over the last two years.

This new approach is intended to ensure that regulation is the last resort for Government Departments. The pressure it creates on Whitehall Departments will mean that each new regulation is considered to ensure that it is necessary and delivered in a way which avoids unnecessary business burdens.