Sunday, 13 May 2007

Red tape myth repeated in Sunday Times yesterday

Rachel Bridge in yesterday's Sunday Times (tried to find link, but their website still has last week's articles on it; it is on page 15 of Business section of the paper version), repeats this myth that we all spend many hours a week on so-called "red tape".

She reports a new, even scarier statistic about how much time businesses spend dealing with red tape. Not to be outdone by the FSB claiming that businesses spend 28 hours a month on government red tape, a business-advice outfit called Peninsula claims that small businesses spend an average of 9.5 hours a week just on employment law and HR matters. That's a whopping 41 hours a month.

Anyone who is so poor at managing their time that they have to spend more than one entire day a week on "red tape" shouldn't be in business.

What are these businesses doing that we aren't? I suspect this figure must include-lots of things which aren't "red tape" (i.e. government-imposed bureaucracy), although that is not how the Sunday Times / Peninsula are presenting it. "HR matters" may well include lots of important and valuable work which isn't "red tape" at all. If you run a service business, most of your time is going to be spent managing your staff. But that is the nature of your business, nothing to do with government-imposed bureaucracy.

And I am deeply skeptical of Peninsula's claim to be campaiging to reduce red tape. They are, I think, really campaiging to increase awareness of (belief in?) red tape. Their business depends on other businesses believing that red tape exists, is excessive, and is expensive to comply with, so those businesses pay for Peninsula's advice.

They are not a credible campaigner to reduce red tape. It is like a petrol company lobbying the government to require cars to be more fuel-efficient.

I say again that a much more productive stance for the Sunday Times, the FSB, and anyone else in a position of influence is to say "we, in Britain, enjoy loose regulation and are generally trusted to manage our own affairs, unlike businesses in the USA and mainland Europe. We'd like to keep it that way."

You don't want politicians and bureaucrats to think that we operate in a highly-regulated environment. If they think that, they won't worry about adding a few extra regulations here and there. It is like dropping litter on the Tube: if you think you see other people leaving their litter in a particular corner of a platform, you might not worry about leaving your empty coffee cup there. One more won't make any difference. But you wouldn't dream of leaving your empty coffee cup on a pristine platform. So it is with red tape: if, as a politician, you think there is already lots of red tape around, and that most businesses set aside a day a week (!) to deal with it anyway, adding an extra trivial regulation (which, your RIA tells you takes five minutes a week to comply with) really won't make any difference, you would go ahead and implement it.