A good article.

Blaming a moribund economy on too many rules is a hackneyed neoliberal trope – UK plc needs smarter regulation, not less regulation

In the run-up to the chancellor John Healey’s high-stakes Commons address, the government issued a press release last week promising his plans would include measures to “slash the red tape choking firms”.

Getting the interfering state out of the way of the wealth creators was a trope of Thatcher and Reaganite economics, and on this side of the pond it has been repeated ad nauseam by every government since.

Thatcher unleashed the City with her “big bang” deregulation drive, and her successor John Major was enthusiastic about “hacking back the jungle of red tape”.

Boris Johnson wanted to unfetter Britain’s businesses from “Brussels bureaucracy” and waffled on during the Brexit campaign about bendy bananas. Yet, after Brexit, business groups said their members would rather comply with longstanding EU standards in many areas than adopt an entirely new UK regime. And bananas are no more or less bendy than before.

There is nothing wrong with ensuring the interaction between business and the state is smooth. But even during the early years of neoliberalism, the free market good, regulation bad dichotomy was always unhelpful, for several reasons.

First, good regulation – a robust competition regime, for example – is essential to make markets work well. And even most enthusiasts for a laissez-faire approach would acknowledge the need for some basic quality standards – for food and medicines, for example.

“The neoliberal illusion, that privatisation liberated markets from state interference, obscures the reality that the state already significantly controls our privatised utilities, but through a maze of arm’s length regulatory agencies which operate outside democratic influence.”

For the water sector, privatised in 1989, these include Ofwat, which sets bills (with the Competition and Markets Authority acting as an appeals body in the event of a dispute); the Drinking Water Inspectorate; the Environment Agency; and the Consumer Council for Water.

Yet, as Yang points out, none are responsible for drawing up a coherent plan for the sector as a whole. “Everyone knows how this story ends: with our rivers polluted and our water infrastructure dangerously lacking.”

Hacking away at the regulatory thicket fails to deal with the structural features of the economy that make the rules necessary in the first place.

“Regulators continue to be labelled as ‘blockers’ despite the vital work they do keeping us safe and protecting our natural environment,”