When the One-In, One-Out rule was launched in 2010, the stated objective was to “bear down on the cost and volume of regulation in the economy.” The central aim of the policy was to restrict government departments from implementing new regulations, unless they also identified for repeal another regulation with an equivalent estimated cost to business.
The introduction of this rule by Government placed the value of the UK’s regulatory stock in the context of net-cost to business, rather than net value to society and the environment.
The narrative of “regulation being a burden on business” misses the point that regulation provides essential protection for people and the environment. Government should provide far more focus on the reasons why and the benefits of regulation i.e. in terms of reducing the risk of harm.
When properly framed, regulation is efficient and effective in providing the necessary protection for people and the environment. It also provides an important backstop for businesses to be able to compete on the basis of quality and efficiency – creating a level playing field.
Fast-forward to 2016 and the Government raised it to One-In, Three-Out; new regulations could not be brought forward until regulations with three times the equivalent cost-impacts on business were identified and scrapped.
The One-In-1/2/3 Out rule contains an inherent structural bias, where businesses are assumed to be the primary recipient of beneficial or burdensome regulation. This has given rise to a narrowly defined approach to cost-saving which fails to consider wider society and environmental costs/benefits.
The problem is compounded, because Regulatory Impact Assessments are often poor in the way in which environmental externalities are reflected in cost-benefit analysis. The Government’s aim in the 25yr Environment Plan is to restore and enhance the environment over a generation. As tools and support for natural capital accounting have been developed through the Natural Capital Committee, and with the recent revision to the Treasury’s Green Book for policy evaluation, the potential exists to better reflect environmental externalities and natural capital accounting in decision making; but it’s not being realised yet.
Regulation needs effective enforcement. In the absence of a fully funded regulator able to take effective enforcement action, protections for people and the environment are effectively lowered. This also penalises those businesses that pro-actively manage their compliance and gives non-compliers an economic advantage. It is vital to ensure that regulatory funding for monitoring, pollution prevention work and enforcement is maintained at levels to ensure effective compliance and retain public trust and confidence.
The One-In Three Out rule is arbitrary, illogical and potentially harmful. It should be immediately scrapped and replaced with an appraisal process which considers individual regulations based on their merit for society, the environment and the economy, not just business.
IEMA has submitted evidence to the House of Commons Regulatory Reform Select Committee inquiry into the Government’s de-regulation agenda. Full details on the inquiry, including evidence submitted, is available here.
About the Author
Martin Baxter, Chief Policy Advisor - IEMA. Martin Baxter leads on IEMA's policy and external engagement activity. He works in the UK, and internationally, to support the transition to a low carbon, resource efficient, and sustainable economy. Martin is a regular media spokesperson on a range of business sustainability topic areas. He has extensive experience of networking and communicating at all levels, including with senior parliamentarians, Government officials, business leaders, and academia. Martin has national and international experience in developing and negotiating global and European standards and developing capacity for effective and widespread implementation. He is chair of the International Organisation for Standardisation (ISO) sub-committee on environmental management systems and head of the UK delegation. Martin represents the UK on the European Commission Eco-Management and Audit Scheme regulatory committee. Martin is a board member of IEMA and also the Society for the Environment (SocEnv), where he chairs the SocEnv Registration Authority. He is a Fellow of IEMA and the RSA, and a Chartered Environmentalist.