The recession lingers on and with hundreds of businesses going bust every week. With unemployment still rising there’s one question on everyone’s lips; if Germany and France are out of the recession, why isn’t Britain?
The answer, I believe, lies in the Government’s failure to do three things. First, they failed to regulate our financial sector properly so that our economy was hit harder than most of our European counterparts when the trouble began in America.
The hit was made worse by their second failure, to fix the roof while the sun was shining.
Instead of saving money during the good times, they borrowed more and more so that when the rainy day came, there was nothing put aside to help. But the third and perhaps the biggest failure has been their inability to get the economy moving again. They’ve announced scheme after scheme but each one has failed to deliver. Our businesses and enterprises are suffering as a result.
If this country is to stand a chance of coming out of the recession any time soon, the Government needs to be doing all it can to provide the right conditions. But not only have their loan schemes failed, they actually seem to be making it harder for businesses to operate.
As Shadow Business Minister, I’ve been approached by many businesses who find it harder and harder to work with all the red tape and forms they have to deal with on a daily basis. The Federation of Small Businesses estimates that the average small business wastes seven hours every week complying with red tape and paperwork.
But instead of cutting the amount of red tape businesses have to face, the Government is actually adding to it. The cumulative costs of regulations to the private sector in the last year alone has been over £10 billion, and a survey of the Federation of Private Businesses (FPB) members shows red tape costs small and medium sized businesses £9.3bn each year.
So how should the Government be removing red tape to free up our businesses and encouraging enterprise? Well that’s a question I’ve been asking myself the last six months. Now that I’m working for Ken Clarke as the Conservative’s Business spokesman, I’m working on a new policy to get rid of red tape. Politically, the problem isn’t convincing people that we need to do it – everybody hates red tape – but rather finding ways to stop the quangos, bureaucrats and politicians who relentlessly add new laws to the ever-growing pile. The machinery of Government sees its job as creating rules, and we’ve got to switch it to cutting them. It’s going to be like turning around a supertanker that’s been going in the same direction for decades.
Of course, some regulations are a necessary and desirable part of life. We all want better regulation of banks and financial services, for example. The challenge is to distinguish good laws from bad red tape – a test that this government has woefully failed. The Conservatives will set out a realistic and viable approach to regulation which encourages business productivity and competition. The future health of hundreds of thousands of businesses and the strength of our entire economy depends on it.
Comment by Weejonnie on September 29, 2009 at 1:12 pm
I think a full review of civil procedures is required. Instead of making everything prescriptive i.e. do this: do that a la vogon (or Labour) bureaucracy make it more principle based. i.e. firms set out their goals and adopt their own procedures to attain them. If they work – fine, if not then enable customers to obtain rapid redress. Making people responsible for their own actions and limiting the state to education and provision of information to help them make those decisions will reduce red tape much more than looking at each individual piece with a pair of scissors.
Enabling free choice is a key facet of Conservative philosophy, so we should aim to do so both at work and at home.