Future Co-ops: What makes regulation ‘better’?

Is the co-operative movement political at heart? And, if so, should it be assessing the impact of deregulation? These were some of the questions asked by delegates at...

Is the co-operative movement political at heart? And, if so, should it be assessing the impact of deregulation? These were some of the questions asked by delegates at the Future Co-operatives Conference in Cheltenham Spa.

The two-day event featured a presentation from Christine Berry, researcher at the New Economics Foundation, a think tank based in London. Ms Berry co-authored a report, which argues that the concept of “better regulation” is actually a threat to democracy.

She explained how as part of the “better regulation” agenda civil service economists are required to complete a detailed appraisal of proposed policy changes and, where possible, express all impacts in terms of monetary values.

future conf logop smallerAnother rule, known as “one in, two out”, prevents government departments from implementing new laws that impose £1 of cost to business unless they also repeal £2 from elsewhere, regardless of social or environmental benefits.

The “one in, two out” process also involves the Regulatory Policy Committee, a panel composed mainly of business representatives which receives completed impact assessments and assesses their quality, providing official opinions that must be taken into account by departments.

Ms Berry believes the combined effect of these initiatives has been profound and important social protections have been watered down, such as workers’ protection from unfair dismissal and speed limits for heavy goods vehicles.

Employees who want to bring a case to an employment tribunal now have to pay new fees. The period before employees are protected from unfair dismissal has also doubled, from one to two years. An impact assessment by the Department for Transport estimates that ‘an additional 1.7 to 3.5 fatal accidents and 4.2 to 8.5 serious accidents might occur each year as a result of the speed limit increase’, a 14% increase on average.

“Better regulation isn’t really about anything it claims it is about,” said Ms Berry.

“It’s not about bureaucracy and compliance, it’s not about reducing red tape and costs of complying with the law, it is about keeping to a minimum the costs of any law that imposes burdens on companies, that includes things that those regulations exist to protect.

“For example, the minimum wage is not red tape. Better regulation is not about protecting small businesses or co-ops, it’s just as likely to be harmful to small businesses as it is to protect them.

The call for “better regulation” is also one of the requirements made by prime minister David Cameron in his negotiation with the European Union. Mr Cameron asked for setting a target for the reduction of the “burden” of excessive regulation and extending the single market.

In his proposal for a new settlement for the United Kingdom within the European Union, European Council president, Donald Tusk, said the EU would commit to increase efforts to enhance competitiveness by regularly assessing progress in simplifying legislation and reducing burden on business so that red tape is cut. Details of the exact measures agreed are yet to be known.

“When the renegotiation gets talked about in the British media this stuff is described as cutting unnecessary red tape – with no concept that anyone might be against it. It is going to sail through by default, which is concerning,” said Ms Berry.

She also raised concerns about the possibility of having deregulatory policies such as the “one in, one out” rule replicated at EU level. “We need to stop the UK from forcing Europe to make these changes at EU level as well,” she said.

Delegate Richard Bickle added: “The basis of all protections within the workforce comes from the EU.”

And Jon Nott of Woodcraft Folk said: “This is exactly why the retail and co-op movement started, you didn’t have proper regulation.”

Sion Whellans from Calverts, a London-based design co-operative said: “I am questioning whether this is the threat to our democracy, or this is our democracy? It comes down to the question of whether the co-operative movement is political or not and whether we should be debating it.

“The movement at its heart is highly political.”

Christine Berry at the conference
Christine Berry at the conference

Other delegates highlighted that co-operatives were among the first to sell Fairtrade products and to ensure the levels of salt and sugar were right in the early days, becoming pioneers and addressing the lack of adequate regulation.

Some participants also talked about the regulatory constraints their own co-operatives had faced. David Parker, co-chair of the Jazz Co-op in Newcastle explained how the enterprise had to apply for building permission to build a lift for disabled people – and then re-obtain a licence to run the pub because it now had less space.

Barbara Rainford of the Midcounties Co-operative said that red tape could prove to be restrictive and undemocratic. “We should educate people and get departments to work together, that’s the way forward,” she said.

Ms Berry added: “I don’t think anyone disagrees that there’s certain red tape to be addressed.

“But we have laws against murder. We need some level of collective limits on what’s acceptable behaviour. The UK is already one of the least regulated countries in the world, compared with most other European countries.

“For example, protection at work, being fired, working conditions are lower than in other countries and still being cut back.”

In this article

Join the Conversation