By Marcus Leach

The government has announced plans to double the rate at which the costs of red tape on businesses will be slashed.

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

The new One-in, Two-out rule will be imposed across every Whitehall department from January 2013, and will apply to all domestic regulation affecting businesses and voluntary organisations.

Dr Adam Marshall, Director of Policy and External Affairs at the British Chambers of Commerce (BCC) has said that the new rule will be welcomed by businesses.

“Business welcomes the government’s efforts to deregulate. Unnecessary red tape costs firms time and money and can act as a barrier to growth. The new regime of ‘One-in, Two-out’ should go some way to reducing needless bureaucracy faced by companies," he said.

“However, this rule will only apply to the regulations that are currently deemed ‘in scope’ of the system. This means that a significant amount of regulations affecting firms, including EU regulations, are exempt from this process.

"The system should be reviewed to ensure that relevant regulations are in scope, as this will help to reduce burdensome red tape that prevents businesses from growing, innovating and creating employment. Businesses are doing everything they can to grow in an uncertain economic climate and bold action is needed to deliver growth - part of that must be reducing the regulatory burden on companies.

"Regulatory reduction isn't just about Whitehall processes. Businesses on the ground must feel the load is lightening substantially too."

John Walker, National Chairman, Federation of Small Businesses (FSB), also welcomed the announcement, adding he wants to see an independent body established to drive this culture change.

“We welcome the announcement and hope that it means that departments continue to reduce regulatory compliance demands for small businesses but with greater emphasis on the issue," Walker said.

"The FSB believes this measure will put departments under greater pressure and therefore we need to ensure that tough safeguards are in place so that the system works effectively. Developing a stable regulatory reform system is crucial so that policy makers know what is expected from them.

"We need to see a real culture change where regulation is only developed as a last resort. The FSB wants to see an independent body set up to drive this culture change and create a robust, long-lasting process with real powers to push the agenda for small businesses.”

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