Cutting red tape 'would lead to a £16bn rise in output'

The Government should scrap or simplify one set of regulations for each new set it introduces, according to a report published today which calculates that national output would rise by £16bn if the burden of red tape was cut by a quarter.

The Government should scrap or simplify one set of regulations for each new set it introduces, according to a report published today which calculates that national output would rise by £16bn if the burden of red tape was cut by a quarter.

The so-called "one in, one out" principle is the key recommendation of the Government's Better Regulation Taskforce, set up by Tony Blair when Labour came to power in 1997.

Its other main proposal is for the UK to adopt the Dutch system of setting targets for reducing the administrative burden of red tape, an approach which could cut business costs by 25 per cent or £7.5bn within four years.

David Arculus, the chairman of the mobile telephone group O ₂, who chaired the taskforce, called for a "red tape revolution", adding: "Everyone wants less red tape. More paperwork means less productivity. A culture has developed in government in which the knee-jerk response to any problem is to regulate. We are calling for a fundamental change to the regulatory machine in which the priority is outcome, not admin; prosperity, not paperwork."

He admitted there had been several previous attempts to tackle over-regulation - most famously the "bonfire of red tape" promised by the former trade and industry secretary Michael Heseltine a decade ago. "Our report is different because we have spent four months looking at the problem in depth - learning from the Dutch experience - and have come up with a blueprint of how to do it."

Separately, a report today by the Sainsbury's chairman Philip Hampton, being published alongside the Budget, will recommend a big reduction in the estimated 111 regulatory bodies created since 1997. The Chancellor will also announce the creation of a Better Regulation Executive, led by a senior industrial executive, to implement the recommendations of the Hampton and Arculus reports.