Business minister Michael Fallon MP this week blamed both the financial crisis and the deaths in Mid Staffordshire hospital on the “regulatory culture” of the Labour years. However deregulation risks babies and bathwater territory. What we need is better and more effective regulatory systems so that failures cannot be ignored again and stakeholders are protected.
Tessa Evans is an intern at the Institute for Public Policy Research
Business minister Michael Fallon MP this week blamed both the financial crisis and the deaths in Mid Staffordshire hospital on the “regulatory culture” of the Labour years.
The massive costs the financial crisis imposed on UK taxpayers and on our economy occurred “in the name of regulation”, he argued. The appalling suffering in our hospitals can also be traced back to “rules and regulations” that weigh down the NHS.
To prevent such disasters from happening again, he suggested, we should cut regulations, allowing businesses to focus on their “first task” of creating wealth.
“We must de-regulate further and faster, both at home and in Europe, to remove barriers to growth,” he said.
However, it is striking that Fallon’s attack got little support from the main business organisation in the UK.
Neil Carberry, CBI director for employment and skills, distanced himself from Fallon’s speech, arguing at the IPPR’s ‘Revitalizing Social Europe’ event yesterday that businesses have no desire to “sweep all regulations off the table”.
Carberry argued that “more fastidious and more meaningful regulation” is what the business sector is calling for, and criticised government performance in this area as “not quite what we would like it to be”.
Deregulation risks babies and bathwater territory. What we need is better and more effective regulatory systems so that failures cannot be ignored again and stakeholders are protected.
Pretending that the crisis itself was due to an abundance of regulation defies economic logic and common sense. Instead, the perils of light touch regulation need to be remembered if the finance sector is to service rather than threaten society.
The United Kingdom already has one of the world’s lowest rates of regulation. In the World Economic Forum’s Global Competitiveness Report 2012-2013 it was ranked 8th; two and four places higher respectively than the previous two years.
In 2008, the OECD ranked the UK as the least restrictive country in the world for product market regulation and third on labour market regulation, behind only Canada and the United States.
EU Commissioner Laszlo Andor, speaking at IPPR’s event, also dismissed Fallon’s plans, arguing that the lack of recovery emerged instead from the “failure to sort out the banking system” and the inability to “eliminate doubts about the future of the single currency”.
Andor also joked that “the country with the triple dip recession should not lecture the EU on economic growth”, suggesting that the government needs to move away from its obsession with regulation if it is serious about growth and recovery.
30 Responses to “Experts line up to distance themselves from Fallon’s deregulatory push”
Mick
Labour created our own mess by driving the economy to ruin by overspending and rampant borrowing. With nothing in the kitty and most of our gold sold ofgf cheap by Gordon Brown.
And whilst lefties blame American fat cats for the sub prime scandal, it must be remembered that Barack Obama backed it at one time for ‘equality’ reasons. And a couple of years back, he ordered banks to do it again.
Mick
People always say the NHS is underfunded under ANY government. And as I recall, more cash than ever has been pushed into the NHS and half never seems to do anything to cure any patients.
The system does need reform. Maybe abolish Trusts altogether, except as small sub-contracted groups to handle new laws or source supplies, leaving specialists and bursars to handle money direct at hospital level.
Newsbot9
Yes, keep up the myth-making. The percentage of GDP spent on the NHS was very low under Thatcher, and still lags the average for the developed world.
And of course you want massive duplication of function and a loss of accountability. Gotta pull that cash away from patient care somehow!
Newsbot9
That’s right. You’ll have to pay for a regulator, a supplier AND an insurer. Two of those regardless of your means and if you get treatment, of course.
Of course you need to abolish universal coverage, have massively expensive premiums, have only basic cover in most cases…with few staff. People will “pay” for healthcare and get very little. But your health companies make a massive profit (primarily off the government mandate, of course).
Meanwhile, actual health workers rather than a few people who do nothing because they’ll get sent to jail, in a few sites around the country, will require a separate payment… And of course you want cash-up-front for A&E too.
And you’re infected with hatred. Get out, or pay tax. Pick.
Newsbot9
Keep on mindlessly chanting the Austerity Gospel of St. Osbourne