Supplementary memorandum submitted by
As the UK's leading business organisation, the
CBI speaks for some 240,000 businesses that together employ around
a third of the private sector workforce, covering the full spectrum
of business interests both by sector and by size.
This evidence supplements CBI's original written
evidence to the Committee's inquiry, and the oral evidence session
on 1 April 2008. It responds to the questions raised at the oral
evidence session on work on better regulation in the United States
of America, and comparative evidence on burdens and growth.
What is the USA doing on better regulation?
The US has the longest experience of Regulatory
Impact Assessments of any country in the world, and continues
to lead the field with its innovations. An overarching and thorough
approach to the question of regulatory consultation and review
can be traced back to 1946, and the passage of the Administrative
Procedure Act. The APA covers both independent agencies (over
50 of them) and government departments; it sets out common standards
and approaches to regulation.
The APA was substantially amended under Presidents
Reagan and Clinton, to increase the emphasis on "better"
regulation, including more cost benefit analysis. In 1980, the
Paperwork Reduction Act set up the Office of Information and Regulatory
Affairs (OIRA) within the White House Office of Management and
Budget (OMB). In 1993, President Clinton issued Executive Order
12866, which reinforced OIRA's mandate and its position at the
heart of federal rule-making.
Executive Order 12866 requires executive agencies
to assess both the costs and benefits of regulation, and to consider
both public and private sector alternatives. EO 12866 then requires
OIRA to review these assessments, before draft rules are published.
In its Draft 2007 Report to Congress, the OMB estimated that in
the last year seven major rules were added to statute in the US
that had gone through comprehensive RIAs. They estimated the benefits
of these at $6.3-$44.8 billion and the costs at $3.7-$4.2 billion,
highlighting the importance of the RIA process in evaluating proposed
EO 12866 also gives OIRA the task of drawing
up government-wide policies on statistics, information technology,
privacy issues, and data quality. This horizontal approach complements
the review of specific regulatory proposals. Because OIRA is located
within the OMB, and therefore the White House, it reports directly
to the President, rather than to policy-making departments. This
helps to ensure independent oversight of the RIA process.
One recent emphasis within OIRA's work has been
on international regulatory policy, reflecting the economic reality
that regulations implemented by one country only are less and
less successful. There is now a High-Level Regulatory Dialogue
between the US and the EU, for example, set up at the EU/US Summit
of 2007. The Dialogue has recently published a draft paper on
the impact of their respective RIA frameworks on trade and investment
analysis. This is a welcome recognition of the need to think about
the impact of one country's regulations outside its own borders.
The paper can be downloaded from http://www.whitehouse.gov/omb/inforeg/reports/draft_sg-omb.pdf
Is there any evidence to suggest that increased
regulatory burdens create barriers to growth?
The CBI's London Business Survey in December
2007 stated that the two biggest threats to London's overall competitiveness
over the next five years are underinvestment in infrastructure
(67%) and the threat of increased regulation (42%).
This is backed up in the results of the 2006
Small Business Surveyi as 44% of respondents without employees,
and 60% of respondents with employees, said that regulations were
obstacles to business success. Furthermore the reportii demonstrates
that as businesses increase in employees so do the number who
state regulations as an obstacle to business successMicro
(1-) 59%, Small (10-9) 66%, Medium (50-50) 68%.
i DBERR's Annual Small Business Survey 2006
ii Page 15 of the annex DBERR's Annual Small
Business Survey 2006