BUSINESSES could save billions of pounds in red tape under plans being proposed to Jeremy Hunt ahead of the Budget.
The Chancellor has been urged to consider capping regulatory costs to help businesses thrive.
Backed by several Tory heavyweights, a beefed up watchdog would effectively prevent Government departments from imposing regulations without considering their impact on businesses.
Spearheading the move, former anti-corruption champion John Penrose told The Sun: "Every pound of extra red tape costs that’s hung around the necks of British firms by Governments and regulators has the same effect on economic growth as a pound taken through tax.
"If ministers or mandarins overspend taxpayer funded budgets, all hell breaks loose but we don’t even give red tape costs a budget in the first place, and nobody cares how much gets spent. Governments behave as though it is free.
“I hope the Chancellor takes the opportunity in next week’s budget to curb these ‘silent killer’ costs of red tape, by including them in his economic ‘fiscal rules’ in the same way as taxpayer funded spending.
"It’s the only way to stop Governments and regulators spending other people’s money”.
Tory former leader Sir Iain Duncan Smith said it would be in the interest of Mr Hunt to slash red tape, adding: "Instead of just constantly cutting taxes, cutting regulation is one of the great costs that overwhelms industry, overwhelms start-ups and small businesses."
He said the move could save billions of pounds a year.
Sir Iain had been asked by former PM Boris Johnson to lead the Taskforce on Innovation, Growth and Regulatory Reform (TIGR) in 2021, which had proposed around 100 measures to cut excessive red tape and build new flexible regulation for emerging industries.
He subsequently accused Mr Johnson of having done a "sweet FA" to cut red tape.
Former Cabinet Minister Damian Green also said: “We need growth and to achieve growth we need to cut the costs of bureaucracy for British businesses.
"This must be a key aim for the Chancellor in his Budget.”
While a Treasure source said capping regulatory burdens is not under consideration for the Budget, it is understood Commons Leader Penny Mordaunt is minded to create a new parliamentary hit squad for red tape.
It would work in a similar way to the Public Accounts Committee, which assesses value for money of Government projects.
