Business Minister Michael Fallon said that from January 2013, every new regulation that imposes a financial burden on a company will be offset by reductions in red tape that will save double those costs.

Currently there is a ‘One-in, One-out’ rule that applies to all domestic regulation affecting business and voluntary organisations. It ensures that new regulations that impose new costs on businesses will be matched by savings of an equivalent amount.

That rule will be replaced by a ‘One-in, Two-out’ system which is designed to have double the effect.

Mr Fallon said: “Every year businessmen and women still spend too much time and money complying with government regulations, when they should be developing and growing their businesses. We are impatient for growth and I’m determined to
remove this brake on aspiration.

“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 changes have been welcomed by business leaders.

Simon Walker, Director General of the Institute of Directors, said: “I congratulate the Business department on their move to lighten the heavy load of regulation for British firms. 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.

“Removing twice the burden when a new rule is introduced will help companies expand and create jobs.”

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