From the TUC

Busting the Red Tape myth

24 Jul 2013, by in Economics

Alex Hern and I have written a contribution to the New Economics Foundation‘s excellent series of mythbusters. Ours is on the myth that “red tape is preventing recovery” (also written with the Tax Justice Network) and we point out that, by international standards, Britain is a very lightly regulated country. Surveys of business opinion find that de-regulation is a pretty low priority for most of them – their biggest problem is the depressed demand for their goods and services. And the red tape debate usually misses out the fact that regulations (to protect workers, consumers and the environment, among others) bring benefits, as well as costs. There’s also a shorter version of our argument at the New Statesman’s Current Account blog.

One Response to Busting the Red Tape myth

  1. Jane B
    Jul 25th 2013, 11:12 am

    It’s true that it’s not necessarily red tape per se that worries business, and that finding customers and making sales is the major challenge of the moment. But that’s not to say business does not have any misgivings about regulation.

    First and foremost are changes to or new regulations, which create uncertainty and require businesses to review their internal procedures and reporting. This can be an unwelcome distraction, at best, and very costly in some cases.

    Secondly, businesses do gripe about the unintended consequences of ill thought out regulation, or overly bureaucratic processes associated with some. It’s not the existence of rules so much as the rules that exist, in these cases. Which makes the Government’s decision to abandon the Consultation Code particularly puzzling – 4 weeks of checking that your proposals are sensible, well designed and will achieve their aims really isn’t sufficient.

    But in many areas responsible business actually likes well designed regulation as it prevents rogues from having free license to act irresponsibly, under-cutting them on price due to lax practices and tarnishing the reputation of business as a whole.

    So simplistic debates about ‘red tape bad, deregulation good’ aren’t helpful. What we need is more active Parliamentary scrutiny of regulation to ensure that when the case for regulation is made, it is then well designed and implemented in a sensible and proportionate way.