Reducing the Burden of Government Regulation

Abstract

Government regulations can impose significant costs on businesses that are then passed onto consumers in higher prices. This paper considers the different approaches that the UK and other governments have adopted to try to reduce the burden of regulation, how successful these approaches have been, and what we can learn for current and future government policy. These approaches have included: • Regulatory offsetting - One-In-One-Out (OIOO), (followed by One-In-Two-Out and One-In-Three-Out) prevented the introduction of new regulation unless an existing regulation of equivalent or greater value was removed. Many other countries, including 10 EU member states, have introduced regulatory offsetting rules. • The Red Tape Challenge (RTC) sought to identify regulations that could be removed or reduced via ‘crowdsourcing’ suggestions sent to the RTC website. A similar approach was introduced in British Columbia. • The Business Impact Target (BIT) - where the government set itself a target for regulatory burden reduction. An additional approach (which is currently being considered for retained EU law), is the sunsetting of regulations if they are considered no longer effective at achieving their objectives. The data do not provide a clear picture of the relative performance of the different approaches. However the BIT approach has been the least successful with regulatory costs increasing significantly during its period of operation and the Government consistently missing the target it set itself for reducing regulatory burdens.