The Government is on track to meet a target of cutting red tape by 25% by 2010, saving businesses £3.4 billion a year, according to a new report.
Around £1.9 billion has already been saved under a series of 240 measures aimed at simplifying regulations for firms, charities and the public sector, it was reported.
Regulatory Reform Minister Lord Carter said: "Delivering better, more efficient regulation should strike the right balance between providing essential protections and not stifling business and harming the prospects for economic growth. Smart regulation can play a vital role in creating a better economic environment for business now and in the future."
The Institute of Directors (IoD) challenged the claim and said that, in a recent survey of 500 business leaders, only 3% thought regulation had become less demanding over the past year.
Just over half maintained that red tape had worsened, with almost one in five saying that the increased burden was severe.
IoD official Alexander Ehmann said: "Business just doesn't see the improvement the Government says it has delivered. There is little doubt of the strong commitment within Government to these measures but commitment doesn't guarantee success.
"The Government's better regulation initiatives are unable to keep pace with the additional demands placed on companies."
