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Telegraph
01-05-2025
- Business
- Telegraph
The agenda Britain so desperately needs, but is unlikely to get
From Washington to London, Brussels and beyond, deregulation is the new political zeitgeist. More or less everyone is talking about it, triggered by a combination of Donald Trump's second coming and an increasingly desperate hunt for ways out of today's all pervasive hiatus in productivity growth. It's a welcome change that has been a long time coming. Like a cancer, the tide of bureaucracy, red tape and risk-averse government interference has metastasised into virtually all walks of life, stifling enterprise and gumming up the wheels of economic progress as it goes. Only now, with the fiscal credit card maxed out and living standards in manifest retreat across a broad swathe of advanced economies are the politicians beginning to talk about grasping the nettle with long overdue reform. But talk is easy – action is another matter entirely. With Trump back in the White House, the pendulum is nevertheless beginning to swing; to varying degrees, governments throughout the Western world are thinking about following the US president's lead. Even Brussels has sat up and taken note. It's astonishing, really, that this awakening has taken so long to happen. Columnists like me have been banging on about oppressive regulation for years, even decades, as one of the key reasons for slow productivity growth and the consequent hiatus in living standards. But though successive governments have paid lip service to the idea of deregulation, they have utterly failed to pursue it in any meaningful way. Every crisis or mishap is met with another lorry-load of regulations, and is often accompanied by yet another government agency to enforce them. Rarely are the long-term economic costs of all this risk aversion ever taken into account. In laying the foundations for a high performing economy, it is not enough simply to stabilise the public finances, as Rachel Reeves, the Chancellor, somewhat disingenuously claims she is doing in the UK. She needs to go much further in dealing with the deep structural barriers to growth that have been allowed like Japanese knotweed to flourish and spread, throttling the life out of much gainful economic activity. This is quite a challenge for Labour, which though it has the majority to engage in serious reform, is not ideologically best suited for such an endeavour. High levels of regulation, though an irritant, are generally reasonably easy for large companies to deal with. In most cases, they will have the systems and bureaucracy to cope. But on the whole, it's not large companies that create jobs and growth. For smaller companies, for start-ups and scale-ups, a highly regulated economic environment is much more difficult. Getting the tax structure right is also important, obviously, but for most start-ups, it's oppressive levels of government bureaucracy that act as the bigger deterrent. As Federico Sturzenegger, Argentina's minister for deregulation and state transformation, put it during last week's spring meeting of the International Monetary Fund, too much regulation is anti-entrepreneurship, it's anti-small firms, it's anti-growth, it's pro-corruption, and because it creates high barriers to entry, it's anti-competition. In virtually all advanced economies, we have in recent years seen a remarkable swing away from private sector growth to much greater government engagement with the economy. This trend long pre-dates the pandemic, but was turbocharged by the interventions then deemed necessary. In Britain, for instance, government spending has been left some four to five percentage points of GDP higher than it was before the pandemic, even though the extraordinary outlays associated with the pathogen are no longer needed. Consequent, explosive growth in public sector employment is proving politically extremely difficult to reverse. But there can be little doubt that this kind of 'make work' madness is a large part of Britain's low productivity problem; as evidence, look no further than the fact that public services continue to deteriorate despite the additional taxpayer largesse being heaped upon them. To give her her due, Reeves talks a good game on deregulation. The Planning and Infrastructure Bill (2025) promises to cut a deep swathe across the UK's highly restrictive planning laws; she further promises significant capital markets reform that will make it easier for start-up and scale-up companies to access finance; City regulators are being told to prioritise growth over risk mitigation; some regulators are being lined up for closure or merger; and she's committed to reducing the regulatory burden on businesses by a quarter during the course of this parliament. In terms of intent at least, Labour is doing many of the things the Tories should have done but didn't. Instead they allowed themselves to be sidetracked by years of tortuous bellyaching over Europe. Little good did eventually leaving the EU do us, either; an endeavour supposed to free the economy from the burden of excessive European regulation has succeeded only in duplicating and further enhancing it. But despite Reeves's declared intent, you have to wonder whether her heart's really in it. Quite a lot of what Labour is doing – from its enhanced workers' rights legislation to a much higher minimum wage, the ban on further North Sea oil and gas development, and even relative trivia such as the renewed crackdown on sugary drinks – pushes in the other direction. Some of what the Chancellor counts as deregulation is, moreover, the exact opposite. For instance, she wants pension funds, Britain's largest repository of private sector savings, to invest more heavily in UK productive assets, an ambition which we should all applaud. But if they don't do it voluntarily, she threatens coercion. This is not deregulation. A better approach would be to ease the liability matching rules that force pension funds to invest in UK gilts. Yet it seems unlikely she'll do anything that jeopardises the Government's insatiable appetite for debt. In any case, Reeves's own particular brand of deregulation doesn't hold a candle to the chainsaw of Trump's America and Javier Milei's Argentina. Of course, you can always have too much of a good thing, and it seems quite likely that this is where Trump will end up. To be sure, the pendulum needs to swing, but only back to a more neutral position, not to the other extreme. This is particularly the case with financial regulation – which has plainly gone too far since the traumas of the financial crisis, creating myriad distortions – but needs to be defanged rather than got rid of altogether. Oppressive regulation of the banking sector while finance runs riot beyond its walls is not healthy, and simply means that areas of the market where there is excessive oversight are badly disadvantaged against those where there is none. The accident waiting to happen is no longer among the major banks, which are in danger of being regulated to destruction, but in private credit where regulation is limited. As I say, Reeves is good at talking the talk; I hope to be proved wrong, but I'm not optimistic she'll also walk the walk.
The Independent
14-04-2025
- Sport
- The Independent
Great Britain's gamble pays off but Billie Jean King Cup desperately needs change
It took a brave roll of the dice by captain Anne Keothavong to turn the tables decisively in Great Britain's favour. Last week's Billie Jean King Cup qualifying tie hovered on a knife edge, with a deciding doubles match required to beat the Netherlands and send GB through to the Finals later this year. GB were the favourites on paper and had recent experience of making the Finals, suffering a heartbreaking semi-final loss to Slovakia just six months ago. But a tie that should have been more straightforward proved unexpectedly tricky, as is often the case at the BJK Cup. Debutant Sonay Kartal excelled, winning both of her two singles matches to demonstrate why she has soared up the rankings to world No. 59 this year. But GB's No. 1 Katie Boulter had a tougher time of it in the Hague, requiring three sets to see off the wily veteran Tatjana Maria of Germany and falling in a straight-sets loss to the Netherlands' Suzan Lamens. It was hardly surprising given she has only recently returned to action after two months out with a foot injury, and that she was rusty on indoor clay, a slower surface that neutralises her powerful style and draws out her tendency to overhit. But knowing a defeat in the concluding doubles match would send GB home empty-handed, Keothavong opted for a radical approach. Out went Olivia Nicholls, the squad's only doubles specialist and a recent Indian Wells finalist, and Harriet Dart, Keothavong's preferred pairing. In came Boulter despite her singles defeat and 175th-ranked Jodie Burrage, to face off against the Netherlands' in-form Lamens and the tie's highest-ranked doubles player, world No. 26 Demi Schuurs. Dart and Nicholls had been swept aside by Germany on Friday night, but it was still a very risky call bringing in two power hitters who have scant experience playing doubles together. Still, it paid off. Burrage in particular brought infectious energy, with the British pair smiling throughout, feeding off the support of the crowd and the rest of the team courtside, while the Dutch wilted. The pair were imperious behind the baseline, smashing in winners and overwhelming their opposite numbers, and as they steamrolled through the second set it felt like a berth in September's final had their names on it. GB once again have a very good chance of finally lifting the trophy, with Japan, the USA, Kazakhstan, Ukraine, Spain, defending champions Italy and hosts China the remaining seven teams. But the BJK Cup itself remains a tournament plagued by problems. The women's 'World Cup of tennis' has been in the wilderness for a few years as it tries to figure out a real identity. It was renamed from the Fed Cup in 2020, then spent its first four years under the new name operating with home and away ties to determine qualification spots for a somewhat unwieldy 12-team Finals in one location. After the embarrassing collapse of the planned 25-year, multi-billion-dollar Davis Cup partnership between Gerard Pique's Kosmos and the International Tennis Federation, the ITF has overhauled both tournaments. That has meant that the BJK Cup Finals has been slimmed down to eight teams, mirroring the men's equivalent, with the host nation and defending champions automatically progressing. The final six are contested in a round-robin format this year; from next year the home and away ties will return. The move to slim down the tournament, and bring it in line with the men's equivalent, makes sense, especially given the legacy of the woman it is named after and her career-long fight for parity with the men's tour. But something must be done to make it more attractive to players, with many of the world's best eschewing this week's qualifying ties altogether in favour of practicing ahead of the start of the clay season. The three highest-ranked singles players named in the American squad, world No. 3 Jessica Pegula, former top-tenner Danielle Collins, and rising star McCartney Kessler, all pulled out at the last minute, while world Nos. 4, 5 and 11, Coco Gauff, Madison Keys, and Emma Navarro, were never involved. Poland were thumped 3-0 by Ukraine as they exited the tournament but were missing world No. 2 Iga Swiatek, who would have been expected to make a difference. The appeal of the tournament is seeing the world's best players competing for their country, but with plenty of nations fielding a second-string team, it seems that the majority of players don't take it seriously. Considering the incredibly congested calendar, with ten mandatory WTA 1000 tournaments and ranking points to defend week in and week out, it feels hardly fair to blame the players for wanting a rare few days off. On the flip side, had more of the sport's biggest names been in action this week, more spectators might have turned up. That problem may at least be ameliorated by the return to home and away ties next year. The travelling British fans, replete with Union Jacks, bucket hats and the ever-present brass band, certainly made some noise, but the stands in the Sportcampus Zuiderpark were noticeably empty, even with the home team in action. As for those watching, or trying to, on TV: with GB's ties hidden away on BBC iPlayer and BBC Sport, fans could be forgiven for not knowing the tournament was happening at all – hardly a way of keeping loyal fans engaged, or broadening the event's reach. The point is moot anyway with the decision made to move the Finals to Shenzhen. The Chinese market is lucrative for tennis' governing bodies, but does not make for a good atmosphere. (Perhaps the need to get bums on seats is why China, below every other squad into the knockout rounds at 22nd in the world rankings, have been awarded an automatic spot.) That lack of atmosphere, in turn, is hardly likely to incentivise the world's best players to make the 8,000 mile trek from the US, where the American hard-court swing will have just come to a conclusion. The BJK Cup has moved from its widely reviled November slot to mid-September, to catch players before they're exhausted at the end of the seven-week Asian hard-court season and just want to go home. But no one who has had a deep run at the US Open is going to be keen on heading out for the Asian season early and having even less time to recover. It feels like the Billie Jean King Cup has solved one problem by creating another, with what could be - and often is - a fantastic display of elite tennis hamstrung by familiar issues of the tennis tour. And until the tournament figures out what it is and what it means, it looks set to stagnate.
