- Some businesses have a "secret love" of regulation, using complex rules to deter potential competitors or as a lucrative source of consultancy fees, according to the government's top adviser on red tape. Rick Haythornthwaite, the former chief executive of Invensys, who chairs the government-sponsored but independent Better Regulation Commission, makes the argument in today's Financial Times.
- He cites the City's opposition to the Financial Services Authority's proposals to remove the requirement for people working in wholesale financial services to be approved by it as one example of business's ambivalent attitude to deregulation. "There are many who privately benefit from complex and excessive regulation," he writes. "It supports an industry of regulatory consultants and can act as a convenient barrier to market entry." He highlights the "suspicion" of the government's legislative and regulatory reform bill, which has its second reading in the Commons today.
- One reason for it, he suggests, may be that: "Red tape is like an old teddy bear. We are ashamed to admit an attachment, but rather enjoy the reassurance it provides." Business lobby groups are backing the government's plans to cut red tape. But the bill, which will give the government powers to fast-track amendments or abolitions of regulations with reduced parliamentary scrutiny, is facing a backlash from MPs.
See History and Facts on the Invensys website for a chronology.
- ^Jean Eagleshamand Christopher Adams, 'Businesses have 'secret love' for regulation and exploit complex rules' Financial Times, Published: February 9 2006 02:00 | Last updated: February 9 2006 02:00