Summary
The Government has set a target to reduce the cost to business of regulation by £10 billion between 2015 and 2020. So far it has achieved less than £1 billion and this is almost entirely down to it counting the mandatory 5p plastic bag charge as a ‘saving’ for retailers because of the additional revenue it brings them. The credibility of the Government’s target is undermined by the exclusion of significant costs to business arising from new regulations; the National Living Wage is one of a number of individual regulations that are excluded and which, in total, are expected to add costs to business of £8.3 billion by the end of this Parliament, far outweighing the reported ‘savings’.
Departments do not know the cost to businesses of their existing regulations, making it difficult for the Government to know where to prioritise its efforts to reduce business costs. The focus on reducing business costs also means that departments are not consistently giving adequate consideration to the wider societal costs and benefits of particular regulations, for example where they impact on the environment, consumers or employees. Departments also need to do more to monitor and evaluate the impacts of their regulatory decisions, both to see whether regulations are working as intended and to learn lessons to inform future regulatory decisions.
© Parliamentary copyright 2015
10 October 2016