Operating a 'one in, one out' rule for regulation
The issue
Every year businesses and voluntary organisations spend time and money complying with government regulations.
We want to curb the cost of regulation to business. Central to this commitment is the ‘one in, one out’ rule.
Actions
We are operating a ‘one in, one out’ rule to prevent any government department introducing new regulation that will impose a direct net cost on business and voluntary organisations - unless the department can find savings by removing or modifying another regulation.
How the rule works
If the government needs to bring in new legislation that will impose a direct cost on businesses and voluntary organisations, it has to remove or modify an existing regulation of an equivalent cost. The aim of ‘one in, one out’ is to encourage government departments to use regulation only as a last resort.
Scope
The rule applies to domestic regulation that affects businesses and voluntary organisations. ‘One in, one out’ does not apply to EU legislation unless it has been converted into UK law in a way that goes beyond minimum EU requirements, putting UK businesses at a disadvantage.
A number of other areas are exempt from the rule, including tax administration and civil emergencies regulation. For more detail on the scope of ‘one in, one out’, see ‘one in, one out methodology’ (PDF, 370 Kb) .
How effective is ‘one in, one out’?
The rule came in on 1 September 2010 and applies to regulations introduced from January 2011. Over the course of 2011, the increase in business burdens has remained at, or close to net zero.
Every six months the government publishes a list of all the regulations it has introduced and those it plans to remove. It shows the net direct costs to business. See one in, one out: third statement of new regulation (SONR) (PDF, 479 Kb) .
Fixed dates for new legislation
Any new legislation that affects business will come into force on either 6 April or 1 October each year - these are known as common commencement dates (CCD). Having two fixed dates helps businesses plan for new legislation. Our aim is to publish the SONR before the CCD, giving businesses advance notice of any new legislation that affects them.
Assessing the impact of a regulation
When developing a new regulatory or deregulatory proposal, each government department must carry out an impact assessment. This includes estimating the likely cost to business. Any cost must be offset by removing regulation of an equivalent value.
To ensure estimates are credible, the impact assessment goes to an independent body, the Regulatory Policy Committee (RPC). The RPC reviews cost-benefit calculations and comments on the analysis supporting the policy proposal, including whether viable alternatives to regulation have been explored. It then issues an opinion on whether the assessment is fit for purpose.
Once departments receive a fit-for-purpose opinion from the RPC, and they can demonstrate that new regulatory costs are going to be offset, they can ask for final approval from the Reducing Regulation Committee, a Cabinet sub-committee. See diagram of sign off process for regulation.
See a list of members of the Reducing Regulation Sub-committee and a guide to cabinet committees.
