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October 15, 2024 - 7:00am
This week’s International Investment Summit was meant to be a showcase for Labour’s pro-growth economic policies. However, it’s been overshadowed by a series of unfortunate events — including the P&O controversy, a national blackout warning, and a row over Elon Musk’s non-invitation to the summit itself.
That last one was especially unfortunate against the backdrop of the spectacular SpaceX reusable rocket test. As Yuan Yi Zhu notes, it doesn’t help that Britain is the only country in the world to have developed and abandoned an independent orbital launch capability.
Keir Starmer did launch something this week — an industrial strategy green paper. On closer inspection, though, it’s mostly a rehash of the 2017 industrial strategy developed under Theresa May and later scrapped by Rishi Sunak.
The British economy needs a second chance too, because it’s never fully recovered from the global financial crisis of 2008. Our so-called “productivity puzzle” might not strike most people as a top priority, but what it means is 16 years of stagnant wages, falling living standards and national decline. The return of industrial strategy will help, but we need something more to rekindle growth, which explains Starmer’s startling promise to “rip out the bureaucracy that blocks investment”.
In specific cases, deregulation can indeed make a difference. As the Prime Minister says, it shouldn’t take 4,000 separate documents to build a wind farm. But, more generally, the battle cry against excessive regulation means one of two things: either a bureaucratic review by the bureaucracy itself, which leads to lasting change with the same reliability that turkeys vote for Christmas, or the gung-ho libertarian version in which cutting red tape means lowering standards. This also rarely happens, because faced with the consequences — for instance, Third-World mortality rates on building sites — we don’t have the stomach for it.
Yet there is a better way: to uphold every standard worth keeping but to also target the unnecessary, and therefore parasitic, bureaucracy that grows around it. At the highest level, this means an end to vanity regulation. Look at the way the EU celebrated its Artificial Intelligence Act — as if that compensated for the puny size of its tech sector. Regulation should exist to punish clear breaches of essential standards, not to conjure someone’s idea of a perfect world into being. Anti-discrimination laws are an example of the former; diversity, equity and inclusion (DEI) frameworks an example of the latter.
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SubscribeWhat I expect is a relatively random culling of regulations based on “what the industry tells us” followed by some sort of disaster and a rapid change of heart. We’ve seen this before. For the simple reason that industry will seek a culling of regulation which serves their interests and gives them greater freedom to pursue them. Not one which supports the general good. And the two are not necessarily aligned.
The Grenfell experience should make impossible the destruction of safeguards under the banner of “ripping out” bureaucratic regulations.
Hold on a moment.
Exactly which regulations were “ripped out” in the Grenfell Tower case ?
My recollection was that the regulations weren’t adequate in the first place (side note: regulations invitably lag technology – not all potential problems can be anticipated). Not that anything has actually been repealed or relaxed.
What am I missing ?
Quite the reverse. Grenfell is a powerful illustration that ever-increasing regulation from overlapping bodies with no interest in actual enforcement does not equal “safeguards”.
Actually, the interests of business and the “general good” are more or less aligned.
Bashing the private sector is all very well, but who’s going to generate your wealth? Quangos? The NHS?
The idea of Starmer “ripping out” anything is just laughable. He’s the personification of bureaucracy and regulation.
Really did remind of this quote attributed to Oscar Wilde (apparently one of only three people in history to ever say anything)
Interesting. If correct, that would make Oscar Wilde the man who really discovered Parkinson’s Law. The attribution seems a bit tenuous though – can’t find any original written reference for it.
I’ve seen it attributed to him before, but nowhere can I find a direct citation.
Like a great number of quotes, it’s likely unknown, so gets attributed to the person it most sounds like (Churchill, Einstein etc.).
Whoever coined the phrase, it’s still a great quote.
I agree, but can’t somehow imagine Oscar Wilde concerning himself with anything as mundane as bureaucracy.
In practice deregulation often meant deregulation of the financial sector and global capital. However, when the goal is high asset prices and shareholder value alone, obstructionism in the real economy can actually be the method to achieve this. A good example is the real estate market, which is booming and also completely dysfunctional.
One problem is, there are far too many lawyers in politics. A second problem is, there are not enough entrepreneurs in politics.
Fixing that would be a start.
Institutionalised obstructionism is a major problem here too.
Starmer, is he still here?
The best thing that can be done for the economy in the entire developed world is to abandon the false “climate crisis” and its catastrophic energy policies. Green fever dreams are driving us to economic suicide.