Simon English: The business world's dirty secret: they need regulations in order to survive
Thursday 22 March 2012
Outlook The pre and post-Budget musings of business folk were tediously predictable. Like the revolutionaries in Animal Farm repeating the mantra "four legs good, two legs bad," chief executives and their advisers seldom depart from the script.
Regulations are bad, taxes are even worse. Cliches involving bonfires and red tape are apparently impossible to resist at this time of year.
Doubtless there are bad regulations and doubtless we could live with fewer of them, but the endless notion that all rules are just business killers is both boring and rather dishonest.
Some of them plainly create jobs and encourage entrepreneurs. There's plenty of businesses, indeed entire industries, that owe their existence to a piece of legislation, regulation or tax law.
A simple example: when the Government made the wearing of crash helmets compulsory for motorcyclists in 1973, a bunch of firms making crash helmets saw business boom. Employment was created (and NHS costs for dealing with head injuries fell, let's speculate).
Those rather onerous regulations that ban the use of child slave labour (bonfire! red tape!) do send employment costs up, on the other hand they lead to a healthier adult work-force more able to buy whatever businesses are selling.
Clean beach legislation was a huge boon to the economies of the seaside towns that complied, not daft government interference in the natural rights of chemical companies to chuck refuse into the sea.
The deregulation that industry and this Government believe in so utterly that evidence is never required to back the case has not always been a huge success (to say the least).
Deregulating the banking sector, for obvious example, was bad for both us and, in the end, for banks. They'd have been much better off had restrictions about what they could and could not do had stayed in place.
There was no sense of any of this yesterday from the Chancellor of course. And the CBI, the IoD and various other lobbyists banged on in the usual manner.
Sometimes a bunch of business chiefs get invited to 10 Downing Street and are asked to opine about the most awful piece of regulation they have to deal with. For a change, and for balance, how about next time they are asked to come up with the one most useful piece of rule-making, the one which has led to spectacular wealth creation.
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