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December 21, 2012

Government steps up its war on red tape with "one-in, two-out" initiative

Businesses have saved a total of £836 million between January 2011 and January 2013 thanks to the Government's commitment to reducing red tape, according to an independent report.

"One-in, one-out" – the Government rule that dictates that every new cost on business must be balanced by an equivalent saving – is being credited with the achievement.

Now the Government expects to reduce the regulatory burden by a further £83 million between January and June 2013 when "one-in, one-out" is replaced by "one-in, two-out". Expected measures include reforms to environmental regulation, employment law and consumer law.

The report shows that the overwhelming majority of Government measures affecting business are deregulatory, with only ten new items imposing new costs on business compared with 89 that will save money or will impose a zero net cost.

Recent deregulatory measures include:

  • simplification of the registration of company charges, saving £21.9 million
  • a series of changes to building regulations
  • less heavy-handed health and safety regulations for low-risk businesses including shop and offices

Business minister, Michael Fallon, said: "The Government has a very simple objective: to make the UK the best place in Europe to start, finance and grow a business. This requires a fundamental culture change in Whitehall, so that new regulation is only imposed as a last resort. We'll now push departments to go further to bear down on costs imposed on business, and we'll fight harder to get EU bureaucracy off the back of our entrepreneurs."

Alexander Ehmann, head of regulation at the Institute of Directors (IoD), said: "The Government's red tape bonfire has begun to burn under Michael Fallon's watch. With 'one-in, two-out' kicking in from 2013, businesses hope that the deregulation savings delivered so far could eventually increase to £4 or £5 billion."