Sunday, June 06, 2010

Beware the Red Tapists

Vince Cable, a British politician, has been outlining the coalition government's plans for regulation:

"He promised "radical steps" to remove costly regulation and railed against "red tape", citing £20bn of potential burdens to business from measures inherited from Labour."

But here is something to bear in mind when you see the words "red tape."

"This is an old accounting trick, long used by business groups and the Tories to exaggerate the bureaucratic burdens of regulation. When most people think of "red tape" they are thinking of the administrative cost of a regulation – form filling and the like. When the Tories talk about "red tape", they are often referring to the entire policy cost of a regulation. So, for example, when Labour introduced an annual entitlement to four weeks paid holiday, it cost some businesses a lot. But that's not "red tape" – it's the legitimate costs to business of giving employees a decent amount of leave."

Some regulation is indeed burdensome. Some deregulation is burdensome, as we have all discovered recently. But remember: the word "red tape" is usually, when wielded by a politician, a kind of smear against regulation.


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