Post-independence India became notorious for the thicket of permits and licences a business needed to do virtually anything. This “Licence Raj” became a major obstacle to economic development, and one reason India lagged behind other Asian countries. No individual regulation seemed especially costly or irrational. But together they made it almost impossible to start or build a business, and it took the reforming governments of the 1990s to change things.
On paper, ours is a deregulating government. It is led by people who campaigned to leave the EU because of its tendency to over-regulate and micromanage. It makes the right noises, setting up a regulatory reform taskforce, calling for red-tape slashing ideas, promising a deregulatory ‘Great Recovery’ bill. But Britain is quietly developing a Licence Raj of its own. Here are seven examples.
Restrictions on foods: Under absurd new rules on foods high in fat, salt, and sugar, it will be illegal to advertise breakfast cereals before 9pm – presumably to prevent young minds being corrupted by Tony the Tiger. Supermarkets will be banned from offering buy-one-get-one-free deals on everything from pizza and crisps to chocolate and fish fingers. Restaurants like Nandos will be banned from offering unlimited coca-cola refills.
The rules don’t just determine what shops can advertise or offer. They even decide which shelves can be used. Shop-fronts are strictly off limits as are the ends of aisles and anywhere near checkouts (there are no exemptions for shops with multiple entrances either). Instead of focusing on fixing supply-chains, supermarkets will now spend months trying to game the new rules.
Biodiversity Net Gain: In the midst of a housing crisis, Governments excel at creating barriers to development. Take the requirement that all new builds must provide a net gain in biodiversity. As one planning expert explained it to me: “If you’re building homes in urban centres, it’s a pain. You impact biodiversity, but then lack the land to fix the problem.”
Bee Bricks: In Brighton and Hove, where house prices have risen rapidly, the council now requires all new homes to be built with a ‘bee brick’. A biologist friend can find no evidence of a shortage of accommodation for bees. If only the same were true of people.
The Protect Duty: As of last week, all public venues will have a legal duty to be prepared for a terrorist attack. Staff will need to be trained about likely attack methods and to spot ‘hostile reconnaissance’. This will apply to any venue with a capacity of more than 100, not just stadiums and arenas.
Annual Modern Slavery Statements: Every business with more than £36m annual turnover must publish an annual modern slavery statement. The Government itself concedes many companies see it as a tick-box exercise.
Gender Pay Gap Reporting: Any business employing more than 250 people must publish an annual gender pay gap report. Yet statisticians warn the data can be misused in so many ways that it will struggle to drive meaningful positive change. There are now calls to expand reporting to ethnic pay gaps, despite even more serious practical objections from statisticians.
Net Zero Transition Plans: From next year, all financial institutions and public listed firms will have to publish these. We are yet to learn the precise details, but it is likely businesses will have to set out their emissions and how they propose to address them. Although the rules only apply to large businesses, they will likely create knock-on bureaucracy as they assess all their supply chains.
Despite good intentions, on Boris’s watch, the regulatory burden has grown substantially. Many new rules were initiated under Theresa May, who didn’t get economics or care about growth. But this administration has done little to hold back the tide. As inflation bites and incomes are squeezed, the government can no longer afford to be complacent.