Yahoo Finance Let’s be honest, all regulation – even hedgehog holes – costs public money
All the parties have pledged additional regulations, but the costs of these largely go unchecked, writes Matthew Lesh
I would not wish to subject even my worst enemy to reading the party manifestos.
It’s not just the cynical vote-buying and vapid platitudes (Labour’s promise to “restore hope” or the Tories’ appeal to “pride”). These documents are a morass of policy minutiae. Wading through hundreds of pages of jargon is enough to reduce even the sharpest mind to mush.
It’s a shame because, despite the vacuousness of the campaign, the parties are proposing policies with serious consequences. This isn’t just about new taxes and spending. In fact, the aspirations on this front, especially from the Conservatives and Labour, are relatively small.
The vast majority of policies are something else entirely: regulation. Hundreds of proposals across manifestos seek to ban, restrict and control.
According to a new briefing from the Institute of Economic Affairs, Labour is proposing 62 measures that would increase regulatory burdens on business. The Tories have 28 increases, while the Liberal Democrats win with 128 increases, only just outshining the Green Party’s 104 increases. Reform UK are the regulatory losers, with just 14 increases.
Some of these ideas are daft, like the Green Party’s compulsory hedgehog holes (p24) in all new fencing. But most are nice-sounding efforts to resolve a serious environmental or social problem. The trouble is that there’s no attempt to calculate the costs and benefits.
For example, the Conservatives, Labour and SNP are calling for the introduction of ‘Martyn’s Law’, which would mandate risk assessments, staff training and enhanced security protocols for nighttime and hospitality venues. The trouble is that this could cost a struggling sector an astonishing £2.7bn, according to a government impact assessment. It’s also unclear whether the law would actually stop any terrorist acts.
It’s easy to comprehend why parties propose so many new regulatory ideas. The implications of taxing and spending are clear and easily countable. All parties are weary of allegations that their sums do not add up.
No similar scrutiny is applied to regulatory measures, whose costs are often difficult to determine in advance. This is not helped by the vagueness of many of the proposals (a commitment to take “decisive action to improve” building safety, “action against” black market gambling). This means ‘fully costed’ manifestos are anything but costed, leaving us in the dark about their true implications.
However, from what we do know, the indications are that regulations could impose far higher costs than any tax and spending proposals. Labour is putting forward five tax-raising measures, which are expected to increase revenues by £8.6bn. According to a government impact assessment, just one of their policies, requiring privately rented homes to meet higher energy standards, would cost £12.2bn. The Liberal Democrats and Green Party want the same policy.
The news is not entirely bad. Across manifestos, there are some proposals that could help ease burdens. In particular, the Conservatives and Labour want to reform the planning system to enable more housebuilding and expedite infrastructure delivery. If they succeed, this could shock Britain from its anaemic growth trap.
Still, this election’s greatest threat to our prosperity could be an avalanche of new red tape hiding behind feel-good promises and empty rhetoric.
Matthew Lesh is the director of public policy and communications at the Institute of Economic Affairs
