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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