Regulation cap mooted

The Government could cap regulatory budgets to reduce the bureaucratic burden for businesses, business minister John Hutton has announced.

And Government departments may be forced to offset new regulations by cutting regulatory measures in other areas, he added.

The proposals, put together by the Better Regulation Executive (BRE), form part of the BRE's plan to reduce businesses bureaucracy by a quarter in the next two years.

They include creating a rolling limit on costs of new regulation, and setting individual budgets for departments to stem the introduction of new bureaucratic controls.

Hutton said that too much regulation can "stifle enterprise and blunt our competitive edge."

"If the UK is to remain a respectable place to do business, we must not expect business simply to absorb the costs of a stream of new Government initiatives," he added.

The BRE has also proposed to improve guidance on health and safety regulations for small firms. In a report published today it said that small companies could save up to £300 million a year with better advice and support on health and safety.

Hutton added that reducing paperwork for low-risk businesses and making regulations easier to understand could not only cut costs but may help create safer working environments.