What has happened to deregulation?

One of the promises of Conservatives in Opposition was to remove needless or burdensome regulations, to allow more people to set up and grow businesses.Such general promises are always popular, and many in business feel they do have to spend too much time and money on compliance with regulations which do not help them be safer, better or more honest.

I drew up a set of policies before the 2001 election as Shadow DTI Secretary. I did it again for Michael Howard as his Shadow Deregulation Secretary, a post created to stress the importance of the task  by giving it a seperate voice around the table. I did it again for David Cameron as part of the Economic Policy Review. Indeed, that single chapter swamped much else in the report, as the media thought it more interesting than the advice on general economic policy,  transport, education and training, energy or pensions.

Alan Duncan undertook another review as Shadow DTI Secretary in the last Parliament. He concluded with a number of proposals to set up procedures in government to cut down the burden.

The Coalition government  said  it too was committed to deregulation. It announced a Freedom Bill, which some of us thought would include deregulatory proposals to help the economy as well as measures to restore lost civil liberties. I sent the proposals from the Economic Policy Review to the Deputy Prime Minister, but have since learnt that his Bill is being transposed into a Home Office civil liberties Bill only. Meanwhile Nick Hurd is busily consulting on what could be done by way of deregulation. This week David Young has been asked to review the topic again from the perspective of small business.

You can overstudy a topic. If all are agreed  that we have too many rules and regulations, if all accept that many of these rules do not deliver what they promise or even do the opposite, the task ahead is to repeal and amend to cut the burden and improve the effectiveness where  regulation is needed.

In the Economic Policy Review we presented 33 specific areas and measures where we thought repeal and amendment could cut costs and improve effectiveness where needed. The  working party which studied the issue in more detail made 65 specific proposals for repeal, amendment and improved process.

Doubtless the government  will have good reason  not to adopt all these. However, the work was done and the list is long. It contains enough ideas that should be acceptable to a government keen on enterprise to make up its first Deregulation Bill. The sooner it does so, the better. If it wants a strong private sector led recovery it needs to make it easier for business as soon as possible. As we said at the time of the launch, deregulatory cost reductions are as good as a tax cut for business, without losing the state revenue. They may even cut the state’s costs as well.

The good news is that those proposals which required action from the Local Government Department have been pursued with alacrity. We argued for the removal of the Best Value regime, the Comprehensive Performance Assessments, regional targets and planning, and Home Information packs. They are doing this.

Ministers should not spend more time consulting business about the general question of what should we deregulate. Exisiting businesses can handle existing regulations and often see them as allies to keep others out of a market. They should move straight to proposals, and consult on those concerning the implementation.

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36 Comments

  1. norman
    Posted November 4, 2010 at 6:55 am | Permalink

    The coalition really do need to show they are a government for growth.

    Part 1 of the economic policy has been laid out, albeit rather badly handled.

    It’s now time to concentrate on the private sector.

    The private sector is going to be hit with significant tax rises from the new year whilst the cuts in the public sector won’t be taking place for another two years. The government desperately needs to turn it’s full attention to helping the private sector grow through what will be a difficult year.

    It’s no good just saying ‘Above trend growth is our magic bullet’ and then not implementing the proven policies that stimulate that growth (tax cuts, sensible monetary policy, deregulation).

  2. lifelogic
    Posted November 4, 2010 at 7:29 am | Permalink

    Perhaps we need a general law that allows people and industry to ignore regulations if they can show that they are largely pointless and there are no serious safely tax or other serious implications.

    So for example selling vegetables in pounds and ounces or not having the silly energy performance certificates, using bus lanes when no buses are about or not using the deposit protection scheme for tenant deposits. This would at a stroke get rid of millions of things that pointlessly inconvenience people and industry and cost the country a fortune in lost production and diverted energies.

    If the state sort to enforce a regulation they should first have to prove to a court (and preferably a jury) that the regulation served a real and valid purpose on health and safely or other very sound grounds and that these grounds were far more significant than the inconvenience caused by the regulation.

    This before any action could be taken against anyone.

    • Stuart Fairney
      Posted November 4, 2010 at 9:23 am | Permalink

      Great idea, the DPS is my bete noir, both unresponsive and the arbitration system one company is proposing (ie imposing) is so good, I have been trying for over a week to contact them without success (I’m guessing it’s a government body of some sort)

    • startledcod
      Posted November 4, 2010 at 10:38 am | Permalink

      @ lifelogic- What a brilliant idea (which I had not already thought about) de-regulation by way of ignoring poor or inappropriate regulations and requiring the State to prove that the regulation was necessary at the time.

      On the Kingston Bypass section of the A3 running into London the speed limit is 50mph and yet at time there are three lanes of traffic travvelling at 58-60mph. Mass law breaking or the wisdom of crowds? Everyone knows the speed limit is too low.

      • EJT
        Posted November 4, 2010 at 2:14 pm | Permalink

        Agree entirely about speed limits – M-way limits at roadworks are personal bete noir – someone has made a decision that is cumulatively wasting days of my time.

        So, you drive at 60. Bad luck and you’re in an unforeseeable accident, and someone dies. Now, prove in court their death wasn’t due to your “speeding”.

        The answer to bad government and bad regulation is good government and good regulation. Not what lifelogic suggests.

        • lifelogic
          Posted November 4, 2010 at 7:42 pm | Permalink

          What is a good regulation in one circumstance is not in another. A regulation cannot foresee all circumstances where a court could consider the full position should the state feel the need to prosecute.

          Good regulation and Government would be very nice but rather unlikely. An overriding defence where the regulation is (like so very many) simply daft and pointless would surely be “good regulation”.

          Eg. Where the police prosecute people for safely pulling in to the side of the road to make a mobile phone call with the engine running and countless other similar examples where regulation have become nothing more than a back door tax system.

    • lola
      Posted November 4, 2010 at 12:46 pm | Permalink

      Excllent idea. That’s 99% of the ludicrous Financial Services Athority rulebook town the toilet.

    • EJT
      Posted November 4, 2010 at 1:55 pm | Permalink

      This would be a dangerous cop-out on the part of government.

      Firstly, we already have government distancing itself from monitoring and enforcement. So it no longer incurs direct costs of regulating, so it can over-regulate with financial impunity. ( Yes, it reduces tax revenue by nobbling business, but that’s joined up thinking )

      Secondly, I have run a small business, and I still have an involvement. Massive over-regulation places you in an invidious position. Something does go wrong, no-one is fully compliant – no-one can be – but it’s the small guy who is most exposed. I cannot be an expert on every aspect of our business, the safety of supplied equipment etc. , But you are asking me to second guess all of laws and regulations, at serious legal risk. Why should I have to do this ? Overseeing accurate regulation regimes is a core government responsibility. It’s a service we are are all paying for, but which is not being delivered.

      • Stuart Fairney
        Posted November 4, 2010 at 6:52 pm | Permalink

        If I may quote Ayn Rand

        “The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws”

        QED

        • alan jutson
          Posted November 8, 2010 at 9:00 am | Permalink

          Stuart

          Agreed.

          How many new Laws introduced by the last Government.

          Something like 4,000 I believe.

    • Woodsy42
      Posted November 5, 2010 at 12:03 pm | Permalink

      What an excellent idea!
      How about trying to hijack the human rights legislation and get it back into supporting ordinary people? Could it be claimed as an abuse of human rights to cause someone to follow a time consuming, pointless and costly regulation that has no direct impact on other people.
      Just an idea.

      • lifelogic
        Posted November 5, 2010 at 9:13 pm | Permalink

        It certainly should be a breach of human rights. It is not just the waste of time and money it is the fact that even as you do the compliance with the daft regulation you know what you are doing is totally pointless (or even negative in its effects).

        It is a sort of minor mental torture knowing you could be doing something useful and productive for yourself and the country but are being forced by law to do this pointless thing instead.

  3. Robert K
    Posted November 4, 2010 at 7:45 am | Permalink

    Very interesting on all points, and the last one was telling. Some businesses use regulation as a competitive barrier or as a means to increase profitability. For example, the supermarkets have welcomed minimum pricing for alcohol – why wouldn’t they, when they know that volumes will only fall slightly, prices and margins can rise, and all whilst dressing in the cloak of responsibility. As Maggie said, ministers decide, so why don’t they just get on with it.

  4. JimF
    Posted November 4, 2010 at 8:00 am | Permalink

    There do seem to be those Ministers who are getting on with things eg Pickles and those who quiver and debate and end up doing nothing.
    We heard Damian Green on Newsnight last night trying to steer his immigration policy between a rock and a hard place. All you have to do is have a points system like the Canadians.
    On deregulation the choices are clearer, but this is what you get fighting vested interests on one side and being in bed with the Libdems on the other.

    • The ESSEX GIRLS
      Posted November 4, 2010 at 9:46 am | Permalink

      We agree Jim. We have often felt that a position that would repay its costs many times over is the ‘Minister for the way they do things overseas’!

      Australia, from direct experience, don’t have this difficulty of discriminating between those applicants important to the economy, who are selected and fast-tracked when necessary, and the rest within a points-based system.

      ps Well done JR in re-instating the reply facility and making the style of the postings bolder and more customer-friendly at the same time!

  5. alan jutson
    Posted November 4, 2010 at 8:22 am | Permalink

    I think the phrase “reinventing the wheel” comes to mind here.

    Appreciate that things can change in 10 years, but it sounds as though we are getting reports on reports, and then going back to square one again because they do not like the original Author.

    I would hope that David Young is going to meet (or have a series of meetings with you) to at least discuss your past reports and the reasons for your conclusions.

    Finally:

    Would it not be prudent for you to simply be asked to update the original, to save time, money and duplication of effort, or am I living in a dream World.

  6. The ESSEX GIRLS
    Posted November 4, 2010 at 9:11 am | Permalink

    We commented recently on why important issues are being re-reviewed after such a comprehensive study in Opposition.
    This is another example. Eric Pickles, as you imply, has got it so why not the top starategy team?
    This smacks of Gordon Brown – a Review for All Seasons!

    As a small aside surely the new photographer could be financed by the party rather than the taxpayer in the current circumstances?

    • The ESSEX GIRLS
      Posted November 4, 2010 at 10:03 am | Permalink

      We meant to add that in business a good principle is generally not to wait until 100% of all changes can be guaranteed to work before starting the process of improvemnt. Just get on with it.

      Several times in the past 6 months we’ve found ourselves wondering why a PM who no doubt believes himself to be ‘dynamic’ regularly funks an issue. The current handling of the EU problem areas is another prime example of funking. That goes against the grain at that well known secondary school near Slough chaps!

  7. Stuart Fairney
    Posted November 4, 2010 at 9:25 am | Permalink

    “David Young has been asked to review the topic again”

    Sir Humphrey would be so proud, if you listen closely you can hear the rustle of the long, long grass

  8. Acorn
    Posted November 4, 2010 at 9:39 am | Permalink

    A wise man once told me that the most difficult thing for a government to do is repeal legislation. It is like walking blindfold off a cliff. Nobody has any idea what will happen when you repeal primary or secondary legislation; unless you replace it with something very much like the original. The fear of having the results of the repeal splashed all over the media.

    “Eighty six year old blind granny in wheel chair, dies horrible death, due to repeal of law that standardised shape of left handed bottle openers.”

    According to SLD, there are 48,634 pieces of primary and secondary legislation listed in its UK database. If this government manages to repeal one percent of those, it will be a miracle.

    • startledcod
      Posted November 4, 2010 at 10:46 am | Permalink

      They did it in New Zealand in the 1980s led by Roger Douglas (Labour Finance Monister). His pamphlet ‘There’s Got to Be a Better Way’ formed the basis of what was known as Rogernomics and, amongst other things, led to huge de-regulation. It was transformatory; I had business friends in NZ who were skipping like NZ lambs at how great it was to do business in NZ now that the dead and pointless hand of the state had been removed from their shoulders.

      It CAN be done, it requires bravery.

      • lola
        Posted November 4, 2010 at 12:48 pm | Permalink

        Ah. Bravery? In a politician?

  9. Rob Hay
    Posted November 4, 2010 at 9:40 am | Permalink

    Seems that the coalition was long on promises but will come up short on action. We need a machete to regulation not nail clippers.

  10. Iain Gill
    Posted November 4, 2010 at 10:06 am | Permalink

    So according to the front page of the telegraph Cameron has given in to Cable and is to allow continued unrestricted inward immigration on Intra Company Transfer Visas

    Cameron and Cable have just killed two of Britain’s leading industries dead, proving once and for all how little the really understand of the real world

    Not one reply of substance to the hundreds of thousands of letters sent to the Government by folk in these industries who understand what is going on, showing a total breakdown of the basics of democracy in this country

    (foreign companies ed) will be dancing with joy, and will continue to suck money and intellectual property out of the UK and flood our workforce with workers who are (on less favourable terms) and used to undercut British and European nationals

    Today the Conservatives lost the votes of the entire British IT and Telco industries

    Today the Conservatives lost the next election because they have just thrown away millions of British jobs in the private sector

    Lets see a post on this John, after all many workers in your area work in these industries

  11. Posted November 4, 2010 at 11:07 am | Permalink

    Indeed. Deregulation does not have to wait till we have some money, as tax cuts & infrastructure spending may do. Indeed it saves money. Fire 380,000 of the 400,000 ‘elfin safety busybodies & we not only save industry 20 times their cost, 7 1/2 million worker’s effort, but approaching £38 billion including ancillary costs.

  12. a-tracy
    Posted November 4, 2010 at 1:21 pm | Permalink

    What you think of as regulation which ties you into knots and what I think of as damaging regulation are two different things.

    The new equalities act; the new NEST regulations; the new Age Discrimination regulations all make employing people more difficult. If you had a 45 employee business and wanted to grow the new NEST regulations will cost you 1% of your payroll 18 months sooner if you do manage to hire six more people in addition to the near 14% employers NI from April 2011, NEST is just a new tax on jobs that will increase to 3% this wouldn’t be so bad if 8% would buy someone a decent pension but it won’t, if 26% national insurance isn’t enough to buy a decent state pension after 40 years of work then why should NEST be trusted?

    The regulations on making sure no one offends another adult in the workplace won’t be repealed employees are now to be treated like children or you as the employer can be sued!

    No one sets out in business with a purpose of hiring people to dismiss them for fun. Dismissing people gives most employers sleepless nights in the long build up to taking the required action to protect your business. Hiring costs a lot of money now and making a mistake in the interview process is a nightmare, can lose you clients and reputation. You wouldn’t marry someone for life after a one year courtship yet employers are expected to employ someone for life.

    Give business a break, a decent tax break on costs that occur whether you make a profit or not like Employer’s NI or I suspect you won’t see the growth you need.

  13. Pericles
    Posted November 4, 2010 at 1:50 pm | Permalink

    “… deregulatory cost reductions are as good as a tax cut for business, without losing the state revenue. …”

    Far from losing revenue, the state would, other things equal, expect actually to accrue revenue in the form of taxation of the improved profits of business.

    “… They may even cut the state’s costs as well.”

    I should have thought a reduction in regulatory requirements highly likely to cut the state’s costs by eliminating the need of enforcement.

    ΠΞ

  14. Jamess
    Posted November 4, 2010 at 2:03 pm | Permalink

    How about adopting a simple principle that for every word of new regulations the government produces they must remove two words of old legislation?

  15. Ken
    Posted November 4, 2010 at 4:15 pm | Permalink

    The best deregulation we can carry out in my view is to scrap the disastrous minimum wage

  16. Alte Fritz
    Posted November 4, 2010 at 5:08 pm | Permalink

    Does anyone know how much burdensome regulation is imposed by the EU pursuant to mandatory directives?

    For an allegedly independent people, we seem to be rather servile when it comes to obeying bureaucrats who really seem to enjoy regulating others. Since you will not make bureaucrats less keen to enforce, the only answer is to take as vigorous an axe as possible to unhelpful regulation, that is to say, not just regulation which is harmful, but regualtion which does not do a demonstrable good. In other words, tip the balance to make the regulators prove the value of their tools.

  17. sheila
    Posted November 4, 2010 at 5:40 pm | Permalink

    Alte Fritze @ 5.08,
    Your post correctly serves to highlight the plight of pub owners with particular reference to the smoking ban.

  18. Posted November 4, 2010 at 6:08 pm | Permalink

    Civil Servants are responsible for enforcing the regulations and without regulations to enforce, many of them would be out of work. They will always find, to them, perfectly good reasons for retaining (and even enhancing) any regulation that you might care to name. Even many of the EU rules and regulations wouldn’t be so bad, were it not that our Civil Servants, who converted them to UK law, “gold plated” the EU requirements.
    Any slashing of regulation needs to be done by someone totally outside the Civil Service and Government who can objectively ask, not only whether we need a regulation, but what it costs and whether the alleged benefit of the regulation is worth the cost.

  19. Mark
    Posted November 4, 2010 at 9:01 pm | Permalink

    We need a Department for Deregulation, and a similar organisation in Brussels. Jobs can be offered to Civil Servants who will be remunerated mainly in accordance with the number and unpopularity of regulations they succeed in having repealed drawn from a list voted on in order of unpopularity by business (perhaps weighted by employee numbers). Businesses would be free to offer bonuses publicly for successful repeal, up to a limit to prevent deep pockets from having the largest say. You could expect the department to be self-financing.

  20. EJT
    Posted November 5, 2010 at 10:21 am | Permalink

    And there’s the elephant of course. Should be centre stage in the posting and comments, but isn’t. It get’s boring typing “it’s the EU, stupid” all the time, but that doesn’t make it untrue.

    Lifelogic says “good regulation and Government would be very nice but rather unlikely”. Why ? The regulatory regime in 1980-ish was decent – not in today’s cloud-cuckoo universe. ( Myself, I wouldn’t turn the clock back to 1960-ish, there were real deficiencies in safety and environmental practices that were rightly addressed)

  21. Martin
    Posted November 5, 2010 at 10:48 pm | Permalink

    Which government prevented a private company (BAA) from building a Third Runway at Heathrow?

    Which government is keeping the Nimby planning restriction which are throttling economic growth?

  22. Posted November 7, 2010 at 1:42 pm | Permalink

    Well done John. Keeping banging the drum for deregulation. This is one thing the government can do to promote growth that need not cost HMT a penny. In the current tight financial times it must be pursued with all possible energy. It’s good to see so much valuable work has already been done by yourself and others. Keep pushing the government to get as much of it as possible into action.

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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