Government aims to limit cost of regulation

Business secretary John Hutton

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The Government today revealed plans to set limits on the cost of introducing new regulations to British businesses by setting "regulatory budgets" for each Government department.

The department for business, enterprise and regulatory reform (BERR) claims the new measures would cut the burden to business by 25% by 2010.

Proposed changes include the creation of a rolling limit on the costs of new regulation that could be introduced for each government department.

Initial budgets would be introduced in 2009 allowing departments to offset the cost of new regulation with savings made by reducing the existing regulatory burden and trading with other departments.

It is hoped the proposals will improve the thinking of Government, along with business and charities, in planning and implementing regulation more efficiently.

"If the UK is to remain a respected place to do business, we must not expect business simply to absorb the costs of a stream of new Government initiatives." said secretary of state for business, John Hutton.

The consultation will also be seeking views on managing the costs of new climate change regulation outside a system of regulatory budgets, given the complexity and cross-departmental nature of the efforts, and on how independent regulators should be included in the system.

The commitment to consult on a system of regulatory budgets was announced as part of the Enterprise Strategy, launched alongside the Budget, earlier this year.