The Tories and Red Tape

The Conservative Party’s Economic Competitiveness Policy Group has published its report Freeing Britain to Compete. The full report is in this PDF – ecpgcomplete1.pdf.

The paper has a whole chapter on business regulation and the need to get rid of red tape.

Businessmen and politicians, especially Tory ones, have been complaining about red tape for as long as I can remember – and that includes the period when the Conservatives were in power. The trouble is, very few of the complainers actually say what they mean by red tape. All business people hate admin because it takes them away from the core activities of their firms, which are their main interest. Those who own smaller businesses whinge more because they can’t afford to employ as many people to do the crap and end up having to handle it themselves. That said, the regulations on business in the UK are some of the least onerous in Europe.

But, according to the Conservatives’ report, even such regulation as we have is damaging the UK’s competitiveness and much of it is unnecessary:

Government claims that this regulation is all necessary. They seem to believe that without it banks could steal our money, bakers would put nails in our bread, drinks manufacturers would water the beer, pie makers might poison us, and builders would construct houses that fell down when the wind blew. This shows ignorance of how a competitive market works.

Most people running businesses take a pride in their brand and their product. They go to great lengths to make a better pie or to produce a tastier brew. They don’t need regulators to tell them to do so. They do so because they want to, and because it makes business sense.

Competition is the customers’ main ally. It is competition which keeps the bank honest and the pie free of nails. A competitive marketplace soon spreads the news that a brewer has watered the beer. Our competitive market is allied to a vigilant press and consumer groups, who would highlight such tricks should any wish to try them.

So we don’t need regulation because the market will just drive those who deliver sub-standard products or services out of business.

You don’t have to think about that for very long to realise that it is complete rubbish. Food manufacturers do poison people. Even reputable Cadburys kept quiet for four years about salmonella in its chocolate bars before it was caught out. Builders construct poor quality houses too. The British house building industry has been criticised for the dismal standard of some new properties and yet the companies that built them are still in business. And don’t even get me started on crap beer. Brewery and pub company oligopolies have tried to push low quality beer at us for years. In the 1970s, they nearly succeeded in reducing consumer choice to a few competing brands of tasteless fizz. But for the intervention of consumer groups like CAMRA, the choice and quality of beer would have declined.

Relying on the market doesn’t work because companies close ranks against consumers rather than competing with each other to raise standards. The economic power of food manufacturers, brewers and construction companies far exceeds that of consumer groups, let alone individuals. Redwood and Co’s assertion that the market and recourse to the law can replace regulation as a way of protecting consumers has no evidence to support it.

I particularly liked this bit too:

Sometimes regulations achieve something that would happen anyway. You do not need a regulation to stop chimney sweeps sending small boys up chimneys. The invention of the flexible brush and the vacuum cleaner has made that as unnecessary as it is undesirable.

So let’s see. In the thirty years between the Climbing Boys Act of 1875, which finally outlawed the practice of sending children up chimneys, and the invention of the vacuum cleaner in 1905, how many children would have been killed or injured?

“It’s alright, young Tom, you may be suffering from broken limbs and consumption but don’t worry, someone will invent the vacuum cleaner in thirty years and it will all be over.”

And what about this?

Employment regulation is one of the causes of the continuing flight of manufacturing beyond these shores.

Really? I thought the main cause was that the Chinese produce a lot of things far more cheaply than we can. Even without any employment protection at all, British workers could not work for Chinese wages.

As for personal privacy, don’t be fooled. John Redwood might be against ID cards but he’s quite happy for his corporate cronies to compile databases about you.

Data Protection.We recommend the repeal of this expensive bureaucracy, which fails to protect people’s data. The ever growing power of the internet and computers means we all end up on ever more lists, whether we want to or not.

So you might as well just roll over and die then. It’s inevitable that big companies are going to put your details on databases without you knowing about it, so you’d better just get used to it.

I’m as worried, if not more so, about what private companies might do with this data than I am about the government’s intentions. Insurance companies would love to get their hands on medical, lifestyle and genetic data, so that they could cherry-pick the least risky clients and leave the rest of us uninsured. Companies might also use such information to screen out potential employees. Personal data could be stolen or inadvertently sold to criminal organisations, which could lead to identity theft or even blackmail. When my own personal privacy is at stake, I’d prefer to rely on regulation to protect me rather than the market and voluntary codes of conduct. This is one area where I would like to see a bit more red tape.

Don’t get me wrong. There are some good suggestions in this report, such as breaking up the BAA monopoly of London airports, scrapping IR35 and restoring the Social Chapter opt out. However, much of it smacks of a yearning by company bosses for the good old days, when they could exploit both consumers and employees and get away with it, even to the point of endangering lives.

I’m all for getting rid of unnecessary regulation but not at the expense of basic protection for consumers and employees. If David Cameron has any sense, he will keep this report and the people who wrote it at a safe distance.

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1 Response to The Tories and Red Tape

  1. Pingback: The Tories and the Data Protection Act « Flip Chart Fairy Tales

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