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Red tape kills

Posted by Richard Sunday, December 05, 2004

So which is more important – Blunkett stealing £180 from the taxpayer (misusing a first class rail warrant by giving it to someone else’s spouse) or the fact that EU red tape is now costing €1 trillion a year?

Clearly a no-brainer – Blunkett wins by a mile, if today’s batch of Sunday papers is any guide. Unless, of course, you read Booker’s column in the Sunday Telegraph or the only grown-up newspaper in town, The Business, which give the red-tape story front page headline treatment.

Flagged up on this Blog last Tuesday, Allister Heath of The Business follows the story through, pointing out that the figure is based on "ground-breaking but over-looked research published by the US Federal Reserve Bank" which calculates that Europe's failure to reform its economies along US lines is costing an extra 12.4 percent of gross domestic product a year.

The chilling thing is that the EU commission endorses this research yet, despite the earth-shattering importance of the findings, the bulk of the media remain silent.

This leads Allister Heath, in his comment piece on pg. 14 of The Business, to remark that, "someone must have been asleep in Brussels last week – or perhaps the hoped nobody would notice…". He is, actually, too kind. The whole damn media was asleep, missing out on such a major news story.

Booker takes a similar line, pointing out the same bones of the story, that "buried in the European Commission's 354-page annual report on 'Competitiveness' last week was an astonishing admission. If the EU could reduce its 'regulatory burden' to the American level, the report claimed, it could raise its gross domestic product by 12 percent." He continues:

It is 12 years since I began reporting regularly here on the impact on Britain's businesses of the explosion of regulation taking place at that time. I did so partly because I could see that this amounted to a mutation in the nature of our government, which we in the media were somehow not noticing; and partly because the costs and consequences of this new form of state intervention - allowing unaccountable officials to produce a deluge of new laws that were in effect outside political control - seemed unfathomable.

The way our politics are now covered by the media conjures up the image of a theatre. On the stage, hypnotically watched by the commentators, unfolds a kind of continually entertaining soap-opera, centred on the antics of Messrs Blair, Brown, Blunkett, Boris and Co. Just occasionally, someone like me pops his head through the door to ask: "Don't you realise that the real business of government these days is taking place outside the theatre, and none of you are noticing it?"

Now that even the European Commission is admitting that this is responsible in a negative fashion for no less than 12 per cent of the entire economic activity of our country and the EU as a whole, perhaps a few more of the audience will nip outside that brightly-lit theatre to see what is going on.
That is the rub. Generally, the media seems to have given up on reporting real news, focusing entirely on the soap opera. And here we are talking about real news. This is not just some academic debating point. Loss of productivity means real jobs, real lives – and deaths.

On my bookshelf is a remarkable book by Aaron Wildavsky, called "Searching for Safety", in which is cited academic research which shows that unemployment has a real effect on the health of those affected, inducing a significant rise in heart attacks and suicides. Basically, the research concludes, one extra death is induced for every 27.1 percent of individuals losing a job.

Wildavsky’s book is about the unintended side-effects of safety regulation, but conclusions from his work can be extended beyond this field. They can be summed up in one starkly simple sentence: Red tape kills. And that is what the media are missing.