The Government is letting companies dump their costs on the rest of us
By George Monbiot. Published in the Guardian 5th November 1998.
Sir Clive Thompson’s speech could have been written fifteen years ago. On Monday, the new president of the Confederation of British Industry told his members that the greatest threat to British business is “red tape”. “Excessive regulation”, he said, would “suffocate the golden goose”. He singled out trade union recognition, the minimum wage and the Working Time Directive as measures which would “darken the business horizon”.
Sir Clive’s speech, which emerged from a world bypassed by ideas like stakeholding, social inclusion and corporate accountability, unleashed a torrent of vituperation from other delegates about the evils of intrusive government, but one speaker went further than most. We need, he told the conference, to hooting applause, “greater labour market flexibility” and “increasing capital market liberalisation”. The government must create “the most business friendly environment in the world.” Even bankruptcy should cease to be stigmatised. The speaker was the Secretary of State for Trade and Industry, Peter Mandelson.
Norman Tebbit or Lord Young of Graffham could happily have put their names to his tirade. It was an unequivocal signal that this government is pursuing the twin projects of its predecessor: the incremental deregulation of business, coupled with the increasing regulation of the citizen. Polluters, exploiters and bankrupts will be the happy beneficiaries of more protection and less scrutiny, while the state will feel free to intrude even into such delicate matters as family life.
It wasn’t meant to be like this. When he set up the government’s Better Regulation Unit, David Clark, then the Chancellor of the Duchy of Lancaster, insisted that “A fair, safe and prosperous society depends on good regulation. People look to the Government to ensure benefits such as fair terms of employment, a cleaner environment and safer products. In many cases statutory regulations are the only or best way to pursue such aims.”
His perspective was sound, but his plans were doomed from the moment he took office. Clark was forced to appoint Chris Haskins, the chairman of Northern Foods, as chair of the Better Regulation Task Force. Haskins, like Sir Clive Thompson, was a member of the Hampel Committee on corporate governance, which did nothing to disguise its contempt for regulatory burdens on business. “The emphasis on accountability”, the Hampel report declared, “has tended to obscure a board’s first responsibility … to enhance the prosperity of the business over time”.
Nowhere will the consequences of deregulation be felt more keenly than in food policy. In ‘Town and Country’, a collection of essays published on Tuesday, the agriculture minister Jeff Rooker describes “the bitterness” he encountered on taking office, between the consumer safety staff of MAFF and “the farmers’ half of the ministry.” In the past, the farmers’ half had won its battles, but Rooker was determined that it shouldn’t win this time, that the long-promised Food Standards Agency would be more than “just … a change of ethos, maybe even a change of name, a mission statement.”
He had, it now seems, little notion of just how powerful the forces ranged against him were. According to a well-placed government source, the Food Standards Agency is not suffering merely from a delay caused by the row over who should pay for it, as we were told last month, but from a concerted effort to destroy it altogether. The FSA has already been publicly attacked by Chris Haskins: Northern Foods, of course, would be subject to any regulations the agency introduced. Jeff Rooker’s position is beginning to look rather like that of David Clark, who tried so valiantly to introduce a meaningful Freedom of Information Act but was eventually sacked for taking his party’s manifesto commitments seriously. His precious legislation was handed to the man who had done most to undermine it, Jack Straw.
Deregulation of the kind both Clive Thompson and Peter Mandelson relish has another name: externalisation, meaning the transfer to society of costs that business would normally carry. When business refuses to pay, for example, for proper nutritional information and effective food safety measures, then taxpayers have to pour money into the NHS, as more people fall ill. When the Health and Safety Executive is scaled down to “reduce the burden of red tape”, deaths and serious injuries in industry rise. Deregulation is a subsidy for careless companies. We pay for their directors’ bonuses with our lives.
Peter Mandelson’s “business-friendly environment” is an environment hostile to humanity. The goose which lays Clive Thompson’s golden eggs needs suffocating. For it feeds, insatiably, on us.