This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Ambassador Wightman speaks at opening of Korea’s new cost in cost out centre
I am honoured to be here today for the opening of Korea’s new Cost-in Cost-out centre. Successive British Governments have always been clear that some regulation will always be essential to protect citizens, the environment and in the interests of fair competition. So the objective has to be better regulation. And measuring the cost of regulation is central to better regulation. Some of you will have heard me talk about the UK’s One-in Two-out system and the three key points that make it a success. Allow me to summarise these three points now:
First, a system like One-in Two out needs to be consistently applied, by all ministries and regulators. Otherwise the benefits of better regulation are eroded.
Secondly, the system must be credible for business. Business leaders and interest groups must be confident that regulatory changes are benefitting them. They will lose confidence if they believe officials are only interested in getting rid of minor regulations or if officials try to reintroduce scrapped regulations as “voluntary” measures. This new Cost-in Cost-out centre will be crucial in measuring the benefits and winning the confidence of business.
Thirdly, One In Two Out works best as part of a comprehensive better regulation framework. For example, OITO is supported by the Red Tape Challenge, which enables businesses and the public to challenge ministries about existing regulations. The Better Regulation Executive also has a ‘Focus on enforcement’ team which works with regulators, enforcers and businesses to reduce disproportionate enforcement costs associated with relatively minor regulations.
These three points - consistency, credibility, and a comprehensive approach - have helped to ensure the UK’s One-in Two-out initiative is saving businesses 2.1tn KRW (£1.2bn) every year. The burden on business is significantly reduced.
But the benefits of better regulation go beyond financial savings. Better regulation leads to better compliance by businesses. Ensuring regulations are clear, unambiguous, and not disproportionately costly means businesses are much more likely to comply with them.
And better compliance means regulations are much more effective. The same principle applies whether we are talking about financial regulation or health and safety regulation.
Excessive and bad regulation leads to corruption, avoidance and box-ticking. Better regulation protects people, businesses and the environment. And better regulation increases growth and helps business to create jobs.
Thank you very much.