04 March 2016

By Stephen Devlin, the New Economics Foundation

Yesterday, the government announced it intends to cut so-called ‘red tape’ for businesses by a further £10 billion.

As part of his revisions to the Enterprise Bill, Business Secretary Sajid Javid revealed plans to extend the reach of the government’s deregulation target – introducing the controversial one-in, three-out rule, in addition to legislation designed to target the actions of independent regulators themselves.

But according to the World Economic Forum, businesses in the UK are already subject to the least amount of regulation of all G7 countries. So why is our government set on slashing regulation further?

Regulation is often equated with unnecessary and troublesome ‘red-tape’; a costly and damaging burden restricting business, and preventing us from building a more productive economy.

But regulatory costs to businesses are not necessarily a bad thing.

The purpose of most regulation is to curtail private interests when they do not coincide with the best interests of the public. These laws are in place to make sure businesses consider the social and economic impacts of their actions.

Chances are you haven’t heard of the Enterprise Bill, or the one-in, three-out rule. But the Business Secretary’s planned changes have huge implications for you, me and everyone else in the UK.

What is one in, three-out?

Under the last government, the one in, two out rule was introduced in an attempt to reduce regulation. This legislation prevented government departments from implementing any new laws that impose £1 of cost to business, unless they also repeal £2 from elsewhere.

This meant that the introduction of any new, beneficial legislation, would be conditional on scrapping unrelated laws. Any social or environmental benefits are ignored.

The one-in, three-out rule will follow suit: any new laws that impost £1 of cost to business will not be passed, unless they also repeal £3 from elsewhere. Crazy, right?

What’s good for businesses, is not always good for people

Last year the New Economics Foundation revealed the damaging effects of the government’s ongoing commitment to roll-back restrictions on business. One-in, three-out is just another example of a host of measures designed to achieve this.

The combined effect has been profound. Important social rights have been watered down, such as workers’ protection from unfair dismissal and speed limits for heavy goods vehicles (HGVs).

But perhaps more significant is that the space for new initiatives has been dramatically reduced, both by creating a deliberate chilling effect in the civil service and by delaying or blocking proposals that do surface.

Time to take-back control

This is just one part of a wholesale corporate capture of our democracy that is putting decision making into the hands of large businesses. Their interests should not trump those of the rest of us.

It’s high time we took back control. The New Economics Foundation sets out the first steps in its report.

This article was re-blogged from the New Economics Foundation