Cutting red tape has cost the taxpayer billions

A waste of taxpayers' money: This is Tory business minister and twit Michael Fallon. The amount of money his 'red tape' cuts have cost this country mean he should be behind bars, not in front of them.

A waste of taxpayers’ money: This is Tory business minister and twit Michael Fallon. The amount of money his ‘red tape’ cuts have cost this country mean he should be behind bars, not in front of them.

Conservative business minister Michael Fallon has announced that the Coalition government’s cuts in ‘red tape’ are saving businesses £1.5 billion every year. How wonderful for him.

What he has neglected to mention is the fact that the taxpayer will have to pick up the tab – possibly at much greater cost.

Fallon reckons the government is “stripping back unnecessary rules that restrict enterprise and act as a brake on jobs and growth”.

For example, the Coalition has:

  • Removed thousands of “low risk” businesses from “unnecessary” health and safety inspections;
  • Stopped “responsible” employers from being held liable for workplace accidents and injuries that are “totally outside of their control”; and
  • Simplified mandatory reporting of workplace injuries.

The words in quotation marks are questionable. Who decides which businesses are “low risk”? Why would health and safety inspections by “unnecessary” in their cases? How do we know an employer is “responsible”, and why – after being labelled as such – should we believe they would not lie about whether an incident was “totally outside of their control”?

The possibilities for corruption are huge, now that the “brake” has come off.

Fortunately, it is possible to measure – very roughly – the effect of these measures; you simply look at the number of people applying for incapacity benefits.

These are people who are unable to work because of illness or injury. Counting them is not a perfect way of measuring the government’s success in cutting red tape while safeguarding employees’ health, because factors other than the workplace may be relevant in a number of cases. However, these should be seen as a minority only.

We know that, in May 2010, before the Coalition government came into office and started stripping away this “unnecessary” red tape, 28,300 ESA claims were awaiting assessment.

From the same source, we know that the number currently awaiting assessment is “just over” 700,000.


Mr Fallon wants you to believe that none of these claims relate to his red tape cuts but the increase is simply too large to be discounted.

The lowest possible assessment rate of ESA (the amount they receive before their claim has been assessed) is £51.85 per week. Even if all claimants were receiving this, that’s a cost of £36,295,000 to the government, per week. The taxpayer pays that bill.

Over a year, it adds up to £13,247,675,000.

That’s at the assessment rate. Now, some of these may be knocked off-benefit after assessment – but this process, itself, costs money. It costs £311 per claim, according to the most recent official source available to this blog at the time of writing. Clearing the backlog would therefore cost £217,700,000.

This means the cost of assessing the 700,000 claims that have mounted up during the years of Conservative-led, red-tape-cutting Coalition government totals a vertiginous £13,465,375,000.

That’s almost nine times as much as Fallon thinks is being saved – spent on ESA assessments alone!

What a waste of taxpayers’ money.

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  1. sdbast July 9, 2014 at 12:18 pm - Reply

    Reblogged this on sdbast.

  2. Niki July 9, 2014 at 12:42 pm - Reply

    I’m not sure that you can make this correlation, workplace illness and accident cannot surely count for such a majority? While the workplace is going to add towards illness in some cases it’s only going to be directly responsible in a smaller number cases. The correlation might well be a measure of how well businesses and workplaces to treat their sick or injured employees however! My workplace made me redundant on my return from brain surgery and I doubt they are in the minority….

    I do think it’s a tempting argument but I think over estimating this time.

    It’s a very bad idea in itself this red tape cutting which can only have a negative effect on the well being and safety of employees.

    In the numbers I’ve seen, The 700,000 includes about 300,000 waiting for their reassessments as well. Like me…..


    • Mike Sivier July 9, 2014 at 1:48 pm - Reply

      As I say, it’s only very rough. Cut out as much as you like, though, and you’ll still end up with a cost that is a multiple of the total saving for ALL Fallon’s ‘red tape’ cuts, and we haven’t touched on the costs likely to have been incurred by other acts of deregulation.

  3. marcusdemowbray July 9, 2014 at 12:54 pm - Reply

    I am self-employed and run a small business for decades. The time I have to waste on paperwork and red tape is increasing every year, with the last 5 years seeing a HUGE increase with more and more bumf to read and forms to fill. I now even get weekly info emails from HMR&C and others. Their staff get paid to write these long emails, but I have to give up my time (and any income I could earn in that time) to read them all, and I STILL get all the letters too.

    Governments of all colours have promised for decades that they would make things easier for self-employed and/or small businesses but not one of them has improved matters one iota. Decreasing Safety procedures is NOT what small businesses need, we need help to compete with foreign corporations which are rapidly taking over every business and market in UK

  4. MrChekaMan July 9, 2014 at 5:45 pm - Reply

    There is too much red tape, but cutting the parts that relate to safety is the wrong thing to do.

  5. beastrabban July 9, 2014 at 8:53 pm - Reply

    Reblogged this on Beastrabban’s Weblog and commented:
    Mike here shows that the government’s removal of much of the health and safety checks and tests are a false economy, as the money supposedly saved by businesses have been passed on to the taxpayers, who now have to pick up the bill for supporting sick and injured workers. Not that this will worry the government, who will no doubt find further ways to disallow their claims before they even get considered, under the guise of making it simpler, more efficient and so on.
    If you really want to see what people like Fallon want to return us to, before ‘elf’n’safety’ became the bane of business and all sensible citizens, who believe the rantings of the Mail and Jeremy Clarkson, look at the death rate for people killed at work at around the time of the First World War. A friend of mine did, and he concluded that it was actually higher than in the trenches.

  6. Geraldine Mitchell July 9, 2014 at 9:31 pm - Reply

    Its saving profiteers , CEOs. shareholders etc £1.5 billion a year….its costing us an arm and a leg literally…..I’m sorry I feel so depressed with this Governments vandalism and cruelty sometimes a pun is helpful…….

  7. Tim Blackwell July 9, 2014 at 10:09 pm - Reply

    I don’t think there’s any meaningful relationship here. The huge backlog of ESA claims is likely down to chaos and cuts at DWP and failure at ATOS.

    If there were a trend of the kind you suggest, it would show up far more clearly in the industrial disablement benefit statistics: this benefit is explicitly tied to workplace injury and disease, unlike ESA.

    There is no such trend at the present, but of course changes to health and safety rules may take many years to have a visible effect eg if the government relaxed the rules on asbestos safety it might be many years before the results became apparent.

    • Mike Sivier July 9, 2014 at 11:38 pm - Reply

      I don’t buy that; when Mrs Mike became ill due to conditions in her workplace, the company did everything it could to block any claim that its appalling laxness in enforcing health and safety regulations had anything to do with it.
      She would not have qualified for Industrial Disablement Benefit as it is tied only to certain “prescribed” workplace injuries and diseases, and makes no attempt to be inclusive.
      You will recall also that government has, for many years, employed only what it calls “light touch” health and safety regulation, making it possible for employers to diddle injured or sick members of their workforce out of any benefits or compensation they were owed.
      In this context, it seems clear that an increase in ESA claims is the only indicator possible at the moment, even if it is a blunt instrument – but of course I made that clear in the article.

  8. Tracy Graham July 10, 2014 at 9:18 am - Reply

    We have lost our country to huge corporations who are working to hold us to ransom. The government past and present have been working to dismantled any sense of personal worth. We are constantly told that there is only one way to live (exist) that is acceptable, any deviation means we are potential terrorists. The government does not regulate the system for the people, it regulates the people for the system. Your children are not your own, they are drones being prepared to live a life of fear under the command of the secret elite. I am a just a sensitive human being being shamed out of existence.

  9. prayerwarriorpsychicnot July 16, 2014 at 10:29 pm - Reply

    Typical red herring. Pretend to do something which everyone would agree would be a benefit – like stop the tide of mindless legislation pouring out of Brussels which strangle our small to medium size local businesses – but use the opportunity to push constructive legislation back to the dark ages. Puppets of the new European over-lords.

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