From January 2013, every new regulation that imposes a financial burden on firms must be offset by reductions in red tape that will save double those costs.
The new “One-in, Two-out” rule will be imposed across every Whitehall department and will apply to all domestic regulation affecting businesses and voluntary organisations.
This will replace the “One-in, One-out” rule, introduced in 2010, which required the costs of every new regulation to be matched by savings of an equivalent amount.
Conservative business minister, Michael Fallon commented on the reform: “The government is focused on making sure Britain competes and thrives in the global race by helping fire up our private sector and boost enterprise. ‘One-in, One-out’ has driven a profound culture change across government.”
Fallon is the driving force behind the move to regenerate deregulatory policy. Installed in the recent cabinet reshuffle, he promised to “chase ministers up and down Whitehall” to ensure that government considers the regulatory burden on business. He explains: “Our new target will require radical thinking right across Whitehall. It will require policymakers to make tough choices, and to think hard about how to get government off the backs of hard-working and hard-pressed businesses.”
Since January 2011, the Government has exceeded its “One-in, One-out” target, introducing almost £4bn of “outs” compared to just over £3bn of “ins”.
“One-in, Two-out” can be seen as a victory for business groups, including the British Chamber of Commerce (BCC). John Longworth, the BCC’s director general believed: “Whitehall is holding deregulation back and often creating badly-designed regulation, and at the same time businesses are telling us that the weight of European legislation is making them less competitive in global markets.”
Departments have been accused of manipulating and flouting the current system. Ministers have put proposed regulation under particular scrutiny, and found alternatives to regulation wherever possible. Reforms have provided benefits to a wide range of business, including UK’s SMEs.
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