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Government reveals ‘one-in, two-out’ policy to cut red tape

 

The Government’s so-called ‘one-in, one-out’ policy on regulation is to be overhauled from next year following concerns that Whitehall is ‘holding back’ on the Coalition’s pledge to ‘light a bonfire’ on red tape.

 

The Department for Business Innovation & Skills has confirmed plans to upgrade the current system to a ‘one-in, two-out’ policy from January 2013.

 

It is hoped the new rule, which applies to all domestic regulation affecting businesses and voluntary organisations, will minimise the bureaucratic and financial burden on UK firms.

 

Announced in 2010, the existing ‘one-in, one-out’ policy prevents any government department introducing new regulation that will impose a direct net cost on business and voluntary organisations - unless the department can find savings by removing or modifying another regulation of an equivalent cost.

 

The ‘one-in, two-out’ system will operate in the same way, but the removal or modification must be of twice the equivalent cost.

 

Earlier this year, the British Chambers of Commerce claimed that half of all new proposals for regulation in 2011 were ‘not in scope’ of the Government’s commitment to adopt a ‘one-in, one-out’ approach to regulation.

 

Announcing the changes, business minister Michael Fallon, said: ‘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.’

 

The move was welcomed by Simon Walker, Director General of the Institute of Directors.

‘I congratulate the Business department on their move to lighten the heavy load of regulation for British firms,’ he said.

 

‘Business leaders tell us that the amount and complexity of the red tape they have to deal with often makes taking on new staff or extra orders just too risky. We simply cannot afford this to continue if we are to rebuild the economy based on healthy growth in the private sector’.