Obstacle Source

It wouldn’t be allowed: this has been rated on good authority as one of the two most depressing sentences to be heard in British boardrooms. The other is: why doesn’t the government do something about it?       

They must now be depressing George Osborne. The green shoots of economic recovery have started to shrivel — always an awkward moment for a Conservative chancellor, and awkwardly timed for the party conference season.  Worse still, the conventional fertilisers are out of stock. However much he might want to boost demand in the economy, he has no scope for borrowing and spending more money, nor can Bank rate, now at its lowest for 317 years, be usefully cut any further.

Still, if demand must be left to take care of itself, there is always the supply side. (Margaret Thatcher popularised the phrase but could never improve on it.) Ministers can try to make the economy work better, either by getting involved in more detail — intervening before breakfast, as Michael Heseltine preferred — or, on the contrary, by enabling the markets to work by removing the obstacles to competition and choice.  

Intervening is always popular, at least to start with. It shows that the government is doing something. But many of the obstacles began as interventions. They are easier to install than to remove and some will finish up as focal points of resistance, making life more difficult for the government as the Chancellor and his colleagues are finding out.

Tact has not been the government’s strong point. Realising that we no longer need a publicly-controlled supply of pit props, its plans to sell off government-owned forests contrived to make the Forestry Commission popular. Then it advanced on health, retreated and paused to regroup. Moving on to planning regulations, it has provoked first the National Trust and then the Women’s Institute. Already a group of backbenchers has dug in to preserve the Misbourne Valley in the Chilterns from the high-speed railway builders. The Metropolitan Railway has been there since 1892, but can now be forgiven. 

If the planning laws are complex and the planning process dilatory, if the presumption — now challenged — is “it won’t be allowed”, they are not alone. There are the employment laws, which do so much to discourage employment. Every so often the European Commission puts a new layer of bricks on this obstacle. The health and safety rules mean that it is always safer to do nothing. The guide to the tax code has trebled in size in the last two decades. 

A promise to tackle the supply side will not earn the Chancellor a standing ovation, even if his proposals  come with a camouflage coat of green paint, but he needs to make the best of them. If we wouldn’t be allowed, why doesn’t the government do something about it? Sometimes the best it can do is to get out of the way.

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