Employer groups are calling on the government to start seconding civil servants into companies, so they can see first hand the damage over-regulation is doing to UK businesses.
The Institute of Directors (IoD) also wants to see stronger political leadership on business regulation as well as culture that penalises poorly designed or unworkable legislation.
James Walsh, head of European and regulatory affairs at the IoD, said the new Legislative and Regulatory Reform Bill would go some way towards improving the current situation on red tape, but that greater change was still needed.
"We want the government to see the importance of changing traditional Whitehall attitudes so that regulation is no longer viewed as the first and only option. We need a policy culture that is much more pro-innovation, and a flexible approach to the use of regulation is at the very heart of that," he said.
It is hoped that the new Bill will allow ministers to enact reforms much more quickly, reducing red-tape by more than 25% across the economy. It will also be used to deliver a wide range of legal reforms announced as part of the Better Regulation Action Plan in May last year.
In all, the measures could save businesses more than 10bn through the reduction of unnecessary bureaucracy.
John Evason, chairman of the legislative policy committee at the Employment Lawyers Association, said the Bill should enable the government to be much more nimble when making reforms.
"The key for employers is that this will speed things up. It will be much easier for the government to rectify mistakes or remove legislation that is clearly not working," he said.