Stuck in red tape

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Gordon Brown’s plan to relieve the regulatory burden on business is supposed to deliver real cuts in red tape. Steps such as scrapping company secretaries for some businesses have been beneficial. Yet, a year after the legislative and regulatory reform bill was passed, not one rule has been scrapped under the new procedures. The prime minister likes to lecture Europe on why it should adopt Britain’s light touch approach to regulation. He would do better to take a look at where his own government has fallen short.

The first lesson for Mr Brown is that promises to slash “red tape” are a hostage to fortune. Though they make attractive headlines, such pledges rarely meet expectations. This is the third attempt to lighten the regulatory load since John Major tried in 1994. Though it is the most serious effort so far, ambitions need to be scaled back if they are to be credible and the government is to avoid embarrassment.

Second, the civil service culture must change. It has little experience of scrapping rules. Officials win no kudos for doing away with unnecessary legislation. Ministers are trying to break down resistance but this will take time. Civil servants are still rewarded for box-ticking and dreaming up initiatives. Since last year’s regulatory reform bill was passed, departments have drawn up lists that fail to discriminate between good and bad. Plans to introduce a new close season for Chinese water deer are surely not high on the business agenda.

Third, if civil servants are at fault for inertia, ministers are as much to blame for failing to provide direction. Too little thought has been given to deregulatory targets and where cuts should be aimed. Part of the problem is that business and government have different ideas of what red tape is. Ministers cite form-filling and inspections. Bosses say it is being told what to do.

Fourth, a revolt over the bill has also slowed progress. MPs and peers demanded checks on regulatory reform orders that allow the government to fast-track through parliament measures to reduce bureaucracy. The result was a committee of MPs that took time to set up and which is bogged down in minutiae.

To condemn Mr Brown’s plan after just one year would be premature. Twenty orders are in the system. But flawed execution risks creating more bureaucracy, not less. The biggest problem is that it will take a hefty dose of deregulation for business even to notice that anything is happening. The government will say on Tuesday it has met more than half its first round of targets. That is progress. But it underlines how far it has still to travel.

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