The coalition government has been seeking to take some steps to deal with this problem. Its initial approach of “one in, one out” – whereby a new regulation would only usually be adopted if a previous regulation of equal impact was struck off – may have had some impact on at least stemming the tide, but it hasn’t achieved much more.
The problem, of course, is that a commitment to reducing regulation in broad, general terms is often out-trumped by special pleading for a new rule to deal with a particular problem, whether actual or perceived. So, even if a general assumption against further regulating is adopted, the number of exceptions soon dwarfs the rule. Ministers, civil servants and advisers will plead that whilst regulation in general may be undesirable, just a little bit more of it in the specific area they are focusing on is just what is required.
In recent times, though, the government seems to have woken up to the true scale of the task, and has launched the Red Tape Challenge – a wide-ranging, web-based consultation asking businesses and companies to highlight current regulations which impede their activity and stunt their growth.
The concept behind the Challenge is essentially to switch the “burden of proof”. Rather than assuming that wisdom can frequently be found in the advice of a Whitehall mandarin or “expert” pressing for new rules and regulations, companies – and the wider public – are being asked to explain which regulations are inhibiting and limiting their ambitions. The working assumption will be that those regulations highlighted as damaging will be extinguished. The burden of proof will be on those arguing for the retention of the regulation, not those arguing for its removal.
Efforts at deregulation can often feel like banging one’s head on a brick wall. But this doesn’t necessarily mean that one or two bricks cannot be dislodged. This isn’t to say that the Red Tape Challenge is a panacea. There are no guarantees of success.
Firstly, of course, although those in the Westminster and Whitehall village often think in terms of public consultations, outreach programmes and the like. Those in the real world are more likely to be simply dealing with absurd, harmful regulations and trying to turn an honest profit, rather than spending much time on framing responses to government departments. This doesn’t mean red tape isn’t harmful – just that businesses lean towards coping with it, not complaining about it.
Secondly, however infuriating and wrong-headed many regulations may seem, there was at some time, somewhere, some sort of argument for their introduction. This makes it crucial that complaints about existing regulations are not merely enunciated – but, as far as possible, properly costed. Minor irritations will no doubt be noted, but regulations which cost thousands or lead to job losses will be taken more seriously.
I am acting as an adviser to the Challenge with particular responsibility for so-called “disruptive business models” (surely, a better term is “innovative business models”?) – in other words, new companies or ways of doing business which really challenge the “established order”. Are new enterprises being caught by regulation which was clearly designed for a bygone age?
The Red Tape Challenge runs until April 2013. Full details can be found by heading to www.redtapechallenge.cabinetoffice.gov.uk. Disruptive Business Models is just one aspect of red tape being looked at so, if you have any other experiences or suggestions to add, explore the website for all the other areas where you can contribute.
Mark Littlewood is Director General at the Institute of Economic Affairs, and is an Independent Advisor to the Red Tape Challenge.