Public Policy

What a marvellous time the early eighties were. Everything was so clear! To the left, the Labour party: its prescription for economic salvation was further nationalisation of private enterprises in order, as Harold Wilson once wryly put it, to "make Marks and Spencer as efficient as the Co-op." To the right, Mrs Thatcher with her housewife's scissors to cut red tape and "give managers the right to manage." How we heard that phrase again and again. Mrs Thatcher won the argument and the centre of gravity about the economy shifted to the right. The collapse of communism and command economies sealed the victory.

The Labour Party returned to power only after it had accepted fundamental economic changes. The present government, while it has dropped much of the strident Thatcher rhetoric, is averse to excessive regulation. It believes that too much regulation is bad for the economy. Otherwise why set up the Regulatory Creep sub-group?

But not everyone buys the line. The latest manifesto of dissent comes from the CORE campaign. Its 'Red Tape' study rightly points out that business has often overstated the cost of regulation, and underestimated the benefits. True. But CORE overstates its case. Yes, highly regulated Denmark and Sweden are among the top five countries for competitiveness. But the authors are silent about the benefits that a high level of regulation has brought to North Korea, for example.

Today may be less exciting than the early eighties, but the government's pragmatic approach commands broad support - some regulation, some threats to regulate, some 'naming and shaming', and some show-casing of good practice. From companies, a similar pragmatic approach is needed - fewer ideological objections, less crying wolf. The minimum wage didn't bankrupt the economy, and a decent level today would provide a level playing field so responsible companies who want to pay fair wages to staff and contract labour alike aren't disadvantaged by unscrupulous competitors.