Red tape is good

Well, I guess not all red tape is good but much of it is, as noted by Richard Murphy in his tax research blog.

The public sector exists because there are services and products that society wishes to benefit from and which a free market would not provide (or might under-provide). There are many regulations implemented by governments which are designed to ensure that the public gets what it wants. For example, there are price controls in place on services like water and electricity supply, health and safety laws to ensure employers spend money of protecting their employees and so on. When I was a finance director I often heard from colleagues that we should get rid of the bureaucracy. I would reply that some bureaucracy is a good thing: the procedures that ensured staff were paid accurately and on time, for instance. I acknowledge that bureaucratic procedures might be improved and made more efficient but I find it difficult to see how they could be abolished.

Government ministers like to pledge to cut red tape. The Labour government has a Better Regulation Task Force which subsequently because the Better Regulation Commission. And when he was vice-president of the USA, Al Gore headed the National Partnership for Reinventing Government. These sorts of programmes sound like a sure-fire winners: surely everyone hates red tape and wants to be rid of it? Well, it seems that Vince Cable's Red Tape Challenge has uncovered the fact that the public want to keep regulation. That'll be a difficult problem for Cable and David Cameron, not least because there will have been an assumption that cutting red tape would save money. If they keep the regulations they will have to keep the regulators.