David Prosser: The end of red tape? Don't bet on Cable being able to deliver

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The Independent Online

Outlook Poor old Vince Cable. In his opposition days, the Liberal Democrats' Treasury spokesman was one of a small handful of politicians who could look at his approval ratings without shuddering, full of bank-bashing invective and economic commonsense. As a member of the (increasingly) junior partner in the coalition Government, he has had to kiss goodbye to many of the ideas that his fans were so keen on. Instead, he has been reduced to implementing that age-old policy of departments short on ideas: bonfire of red tape.

Leaving aside the irony of the fact that Mr Cable has had to introduce yet another new compliance authority, the rather unimaginatively named Regulatory Policy Committee, to ensure that new regulation doesn't sneak on to the statute book behind his back while he's getting busy with the matches, do we really think this Secretary of State for Business will have any more success than his predecessors in cutting red tape?

Though it may not seem like it sometimes, no government introduces regulation for the sake of it. And all governments say they want to lessen the compliance burden on business. In practice, however, it never works out like that.

One problem – though maybe that word is too pejorative – is the European Union, whose directives we are duty bound to introduce into British law. Another difficulty with cutting back on regulation is that in the 21st century, we have different – and in most people's view, higher – standards.

Life was certainly less complex, for example, for businesses when they could just get rid of a female member of staff who announced she was pregnant. Indeed there is all sorts of regulation surrounding employee rights we could dispense with in the name of cutting red tape. We might not be keen on the results, however.

Similarly, though our health and safety regulations are frequently mocked, a return to a world in which companies were free to put the lives of their staff at risk is not what most of us would wish for (with the possible exception of the Institute of Directors, which made a wonderfully one-eyed plea yesterday for Mr Cable's new committee not to include any representatives from consumer groups or trade unions).

Nor is all that regulation concerning taxation so easy to dump without adverse consequences. The lengthy and complicated tax avoidance measures introduced in recent years have been a response to the clever-clogs accountants who have found increasingly elaborate ways for their clients to hand over less money to the Exchequer. Dump tax avoidance legislation, by all means, but don't be surprised if the tax take falls.

There will, no doubt, be regulation that Mr Cable's team really can sweep away without any disturbing consequences. And anything that the minister can do to make life easier for businesses is, of course, to be welcomed. Still, this cannot have been the policy initiative that Mr Cable dreamt of grasping when he was but a lowly opposition frontbencher. And the sort of ideas about which he used to talk – bigger taxes on the banks, say, or the idiocy of a blanket cap on immigration at a time of skill shortages – might actually have been a great deal more useful to the business sector as a whole.

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