· 2 min read · News

Vince Cable introduces measures to cut red tape and government interference in business


The business secretary, Vince Cable, has announced a comprehensive package of measures to tackle unnecessary government interference and red tape.

The measures will help transform the relationship between people and government by changing how regulations are drawn up, introduced and implemented.

The public is being encouraged by the Government to nominate laws or regulations they want to see scrapped, and today’s announcement means that government interference in businesses and third-sector organisations will have to meet much more rigorous tests before being introduced.

From 1 September, a new One-in, One-out system will begin. When ministers seek to introduce new regulations, which impose costs on business or the third sector, they will have to identify current regulations with an equivalent value that can be removed.

The new rule has been designed to apply initially to domestic legislation affecting businesses and the third sector, with ministers intending to expand the system in due course. To reinforce this radical new approach to how Whitehall will introduce new laws and regulations, and to ensure that the costs of red tape are being properly addressed across the entire British economy, the Government has also agreed a set of Principles of Regulation that government departments must apply when considering new regulations impacting upon business, social enterprises, individuals and community groups.

It has asked the independent Regulatory Policy Committee (RPC) to perform the role of externally scrutinising the evidence and analysing supporting new regulatory proposals, prior to policy decisions being made. It will also analyse proposals for the implementation of EU legislation. In doing so, the RPC will help drive up the accuracy and quality of Impact Assessments.

It has also provided the opportunity for the public and businesses to tell the Government which onerous regulations they believe should be removed or changed through the Your Freedom website, launched last month by the deputy prime minister.  

The Government will engage earlier in the Brussels policy process; take strong cross-Government negotiating lines; and work to end so-called ‘gold-plating’ of EU regulations so that when European rules are transposed into UK law it is done without putting British business at a competitive disadvantage to other European-based companies.

Cable said: "Together these measures represent a fundamental shift in how Whitehall has traditionally used regulation as a way to command and control.

"We have to move quickly delivering credible and meaningful reductions in the burdens that hinder hard-pressed businesses and charities. We have to create a common-sense approach in the way we think about new laws.

"By ensuring regulation becomes a last resort, we will create an environment that frees business from the burden of red tape, helping to create the right conditions for recovery and growth in the UK economy."