Proportionate regulation: what the impact evidence should show
Good regulation is proportionate regulation. We consider what impact analysis needs to demonstrate to support that test.
The principle of proportionality sits at the heart of good regulatory practice. Regulation should impose no greater burden than is necessary to achieve its objective. Demonstrating that a measure meets this test is, fundamentally, an analytical task.
A proportionality assessment requires a clear statement of the problem the regulation addresses, the options considered, and the costs and benefits of each. Crucially, it requires honest treatment of the do-nothing option as a genuine baseline rather than a formality.
Compliance costs are frequently underestimated because they are diffuse and fall on parties who are not consulted. Robust impact analysis seeks out these costs deliberately, including the administrative and familiarisation burdens that headline estimates often omit.
Regulation supported by this kind of evidence is more proportionate and more resilient to challenge. The discipline of impact analysis is, in the end, a discipline of restraint — regulating where the evidence supports it, and no further.
This insight reflects the analytical practice of AO Group and Services. It is provided for general information and does not constitute advice on any specific matter.