To ask Her Majesty's Government what assessment they have made of Open Europe's calculation that the annual cost of regulation increased from £16.5 billion in 2005 to £28.7 billion in 2008; and how these costs apply to (a) central and local administration, (b) private businesses, (c) public sector services, and (d) voluntary organisations. [HL2237]

The Government understand that Open Europe aggregated cost estimates of recommended options in impact assessments on new regulatory proposals, using a mid-point when a range was given. The report ignores the benefits of regulation which usually outweigh the costs. In cases where regulation exists to correct market failures to ensure open markets and competition, those who initially experience costs will often reap the benefits. Simply aggregating estimated costs can therefore be misleading.

The Government recognise that the cost of regulation is a concern and so have changed the way they think about regulation. For example, the administrative burden reduction programme has delivered around £1.9 billion in net annual savings for business since 2006. The programme is on track to deliver more than £3 billion in net annual savings to businesses by 2010. Moreover, international studies, eg the World Bank's Doing Business report, show that the UK has a highly competitive regulatory environment.

The report does not break down costs by sector and, over the period analysed, government impact assessments do not systematically allocate costs between sectors.