Saturday, 21 May 2011

Is this the price of regulation?


Two stories in today's Daily Telegraph. Firstly, Tata Steel is laying off folk on Teeside again - and here's one of the reasons:

EU carbon legislation threatens to impose huge additional costs on the steel industry. Besides, there remains a great deal of uncertainty about the level of further unilateral carbon cost rises that the UK Government is planning."
Heavy manufacturing companies are penalised by European laws forcing them to buy carbon permits costing about £15 per tonne of emissions. 

Assuaging the cod guilt of Mr Huhne and his pals mean hundreds more on the dole in Redcar. Good result there for the Greens and fellow travellers.

Secondly, the banks aren't hitting their lending targets (resulting in froth and splutter from Vince):

Analysts at UBS said that while a "significant proportion" of the fall in lending was the results of poor demand, most of the blame can be placed at the door of the Government and the cost of meeting new capital and liquidity standards.

Tighter regulation means less lending - pretty simple and predictable really.

We might need to save the planet (although I suspect it's fine really) and to regulate the banks. But these actions come at a cost - unemployment, business failure, slow economic growth and more poverty.

But you knew that, didn't you?


No comments: