Mr Willetts, former director of the Thatcherite Centre for Policy Studies, said in a Social Market Foundation paper that tomorrow's No 10 seminar on deregulation would give John Major a chance to seize the initiative on an issue of increasing concern to consumers and business.
He said that the impetus had to come from the Prime Minister because the Department of Trade and Industry represented the interests of large rather than small business, while the Treasury appeared more concerned with spending controls than the stimulation of a free market economy.
Analysing a variety of regulatory case studies, Mr Willetts said that Whitehall aimed for the highest standards regardless of the costs it was imposing on private enterprise; officials tried to put the blame on Brussels or local authorities for their own excess zeal; and that regulation driven by considerations of health, safety and environmental protection could not be allowed to override all cost constraints.
Underlining that latter point, Mr Willetts posed a riddle for Mr Major: 'How can you spend over pounds 200m a year on rail safety and increase transport deaths?'
He said the answer was that by forcing higher spending on rail safety, passengers were being driven on to the roads by higher fares, where the risk of death was almost five times greater.
The Prime Minister should ask for a comparative study of rail and road safety requirements to maximise the number of lives saved, Mr Willetts said.
He added: 'He might also call for a moratorium on implementation of all further rail safety requirements until it has been shown that these will save lives in total.'