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Business Impact Target

Statement made on 20 June 2018

Statement UIN HCWS776


This statement sets the Government’s Business Impact Target in respect of the economic impact on business of regulation which comes into or ceases to be in force for this Parliament, along with related matters as required under section 21 of the Small Business, Enterprise and Employment Act 2015 (“the Act”).

It is important to recognise that the Government is setting an ambitious target. The Government is committed to providing legal certainty and a stable environment for business by incorporating all EU law into UK law, as well as taking necessary action in areas such as product safety, plastics and corporate governance. Consequently, the Government will continue to monitor regulatory impacts rigorously, whilst placing the importance of regulating to tackle these nationally important issues above a strict adherence to the target.

Business Impact Target[1]

The Government’s target is for a saving of £9 billion to business and voluntary or community bodies from qualifying measures that come into force or cease to be in force during this Parliament.

Interim Target[2]

The interim target covers the savings to be achieved from qualifying measures that come into force or cease to be in force in the first three years of this Parliament. The Government’s interim target is a saving of £4.5 billion.

Measurement of the Business Impact Target[3]

The impact of each qualifying measure will be assessed on the basis of its Equivalent Annual Net Direct Cost to Business (EANDCB) measured in 2016 prices and with a 2017 present value base year. As in the previous Parliament, the contribution to the Business Impact Target will be the sum of the EANDCB over the first five years for which the measure will be in force, or the sum of the EANDCB over the full lifetime of the measure for measures that are, or will be, in force for less than five years.

Qualifying Regulatory Provisions[4]

Under the Act, the measures that are in scope for the Business Impact Target are described as “regulatory provisions”. That includes both legislation and the activities of Ministers and listed regulators. The Government must designate the categories of regulatory provisions that are to be scored against the target (“qualifying regulatory provisions”). Qualifying regulatory provisions are regulatory provisions that do not fall within any of the exclusions set out below:

a) Regulatory provisions that have been certified by departments or regulators as falling under the de minimis rule, namely those that have an EANDCB of less than ± £5 million;

b) Regulatory provisions that implement new or changed obligations from European Union Regulations, Decisions and Directives, and other international commitments and obligations, except in cases of gold-plating. This includes measures incorporating EU law into domestic law under the EU Withdrawal Bill and legislation made for the purpose of implementing the EU Withdrawal Agreement, including implementation of new EU law during the implementation period.

c) Regulatory provisions that have been certified by departments or regulators as dealing with deficiencies in retained EU Law (under the EU Withdrawal Bill and other legislation);

d) Regulatory provisions that are intended to deliver – or to replicate – better competition-based outcomes in markets characterised by market power

e) Regulatory provisions relating to systemic financial risk;

f) Regulatory provisions relating to civil emergencies;

g) Regulatory provisions concerning fines and penalties, and redress and restitution;

h) Regulatory provisions that implement changes to the classification and scheduling of drugs under the Misuse of Drugs Act 1971 where these follow the recommendations of the relevant independent advisory body;

i) Regulatory provisions that have been certified by departments or regulators as relating to the safety of tenants, residents and occupants in buildings that stem from, or relate to, Government’s response to the Grenfell tragedy, reviews, inquiries or working groups;

j) Regulator casework including specific investigation and enforcement activity, individual licence decisions, and individual advice;

k) Education, communications activities, and promotional campaigns by regulators, including media campaigns, posters, factsheets, bulletins, letters, websites, and information / advice helplines;

l) Policy development by regulators, including formal and informal consultations, policy reviews, and ad hoc information requests;

m) Changes to the organisation and management of regulators, except for those resulting from legislative changes or another policy change that is a Qualifying Regulatory Provision;

[1] As required under section 21(1)(a) of the Act.

[2] As required under section 21(2) of the Act.

[3] As required under section 21(3)(b) of the Act.

[4] As required under section 21(3)(a) of the Act.

Linked statements

This statement has also been made in the House of Lords

Department for Business, Energy and Industrial Strategy
Business Impact Target
Lord Henley
Parliamentary Under- Secretary of State (Department for Business, Energy and Industrial Strategy)
Conservative, Excepted Hereditary
Statement made 20 June 2018