More regulation to cut red tape?

The Telegraph reports today (24^th October) on the Government wasting billions of pounds by inefficiently regulating the economy. For example, it costs more than £2 billion for the Health and Safety Executive to comply with the regulatory burden. Most departments and government agencies are reportedly putting plans in place and setting targets on how to reduce the waste.

There have been pledges before to cut the red tape but nothing but the opposite has happened. The Better Regulation Commission’s report last week revealed the extent to which the Government over-protects and regulates. So far this year the Government has introduced 33 new acts of Parliament and more than 1000 extra statutory regulations. This does not leave one to wonder why there is little belief in the current pledges to cut the waste on complying with the ever-increasing bulk of rules and regulations.

The article also mentions the benefits the Companies Bill will bring to business. Running to three volumes and containing 1,264 clauses, it is one of the longest, if not the longest, bill in British history. Complexity carries its own costs, as the more complex a system, the more manpower (direct or subcontracted) is needed to make sure you are complying. Will the "reforms in the Companies Bill" take the form of simplification, or will yet more amendments introducing more complexity be made, supposedly in the name of reducing the regulatory burden?

The introduction of targets is likely to reduce waste but it might also lead to departments and agencies trying too hard to meet these at the expense of concentrating on real policy issues. Less regulation, fewer targets and less complex legislation are necessary in order to cut the red tape and to release more finances and capacity to initiatives that matter.