The costs of red tape on business will be slashed at double the present rate as part of the government’s blitz on bureaucracy.

From January 2013, every new regulation that imposes a new financial burden on firms must be offset by reductions in red tape that will save double those costs.

The new ‘One-in, Two-out’ rule will be imposed across every Whitehall department from January 2013, and will apply to all domestic regulations affecting businesses and voluntary organisations.

It will replace ‘One-in, One-out’, which requires the costs of every new regulation to be matched by savings of an equivalent amount. This policy has already reduced net costs on business by almost £1bn since January 2011 helping to make government leaner, fitter and more focussed on what businesses need, enabling them to get ahead and compete in the global economy.

Business Minister Michael Fallon said, “The government is focussed on making sure Britain competes and thrives in the global race by helping fire up our private sector and boost enterprise. Every year businessmen and women still spend too much time and money complying with government regulations, when they should be developing and growing their businesses. That’s why we are upping the pace. Our new target will require radical thinking right across Whitehall. It will require policymakers to make tough choices, and to think hard about how to get government off the backs of hard-working and hard-pressed businesses.”

Simon Walker, Director General of the Institute of Directors, said, “I congratulate the business department on its move to lighten the heavy load of regulation for British firms. Business leaders tell us that the amount and complexity of the red tape they have to deal with often makes taking on new staff or extra orders just too risky. We simply cannot afford this to continue if we are to rebuild the economy based on healthy growth in the private sector.”

Since January 2011, the Government has exceeded its ‘One-in, One-out’ target, introducing almost £4bn of ‘outs’ compared to just over £3bn of ‘ins’.

The government will also work to reduce the burden of tax administration.