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Govt regulation estimates used "statistically unreliable" data

02/07/2008

Savings which the government has claimed could be made by reducing regulation were based on "statistically unreliable" data, MPs have claimed.

The government established the Better Regulation Executive to "reduce the barriers facing small and medium sized enterprises wanting to access the government market".

Its Better Regulation Task Force claimed it could increase gross domestic product by £16 billion, albeit for an investment of £35 million.

However, a House of Commons Public Accounts Committee (PAC) said it is not convinced. Its report noted "the strength of the link between the level of regulation and productivity growth is not certain".

It made numerous recommendations and criticised the executive for introducing a reduction programme, which was based on "potential" benefits of a similar, but yet unevaluated Dutch scheme.

"It did so before any assessment of the actual outcomes of the Dutch exercise," the PAC concluded. It also noted "evaluations of the Dutch experience now show that businesses have not noticed the full impact of changes".

 

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