Here we are, as a nation, trying our best to recover our economic growth, without having the benefit of the usual stimulants which helped us so profoundly after the ‘crash’ of 2008 i.e. Quantitative Easing, cheap money and a buoyant housing sector.
With the added uncertainty of Brexit, we are now introducing yet another form of regulation/compliance, the GDPR (General Data Protection Regulation).
I’m not saying that the consumer doesn’t need protecting and there is no question that elements of the GDPR, does provide this much needed facility, but don’t you agree that with all the other suffocating regulatory restrictions, this must be the ‘straw that breaks the camels back’?
Don’t forget, we already have data protection, money laundering, The Bribery Act, The Estate Agents Act, Right to Rent, fire regulations, Legionella assessments, electrical certificates, health & safety and KYC (know your client) which together, form a vice like grip, which a Python could only aspire to!
A Perfect Example
May I give you a perfect example?
Glentree wanted to encourage a private wealth department of a well-known clearing bank to do business with the idea for them to simply introduce potential clients to the business, who may like to buy or rent property in London and where they could be offered a convenient, ‘one-stop-shop, service. The plan was that Glentree would not take any deposit monies, since this would always be dealt with by the client’s independent solicitors.
The Bank, understandably, asked for Glentree’s accounts, which were given to them, and every interminable question about them and the shareholding structure of the Company, were answered. This involved the Company’s solicitors, accountants and other professional input.
This tortuous journey lasted over one year and when Glentree went back to the Bank to suggest that the matter should now be brought to a conclusion after all this time, they responded by saying that since due diligence had taken so long, they needed another set of up-to-date company accounts, for compliance purposes.
Glentree were at their ‘wits end’ and ‘called time’ on the entire matter, which they thought had morphed into a ‘feeding frenzy’ of circuitous bureaucracy.
The relationship was brought to an end and Glentree told the Bank, in no uncertain terms, that ‘bureaucracy and regulation were the victor’s and commerce the vanquished’. Let this be a lesson to others.
This is a perfect illustration as to how the ‘regulation tail’ today, is ‘wagging the dog of business’ and that the ‘compliance lunatics, are now running the asylum’.
Cure worse than the ailment
As an estate agent you cannot start any form of business until KYC has been carried out on the tenant, landlord, buyer or seller and that is before all the other regulations are satisfied.
‘The cure is now so much worse than the ailment’ and is it any wonder that the smooth flow of business is being asphyxiated by these inane regulations?
Lest we forget, after the Second World War, Ludwig Erhard was the German Minister of Economic Affairs from 1949-1963 and his wide reaching, deregulatory reforms, helped the German economy rise exponentially from the shattered ruins of the War. This was so effective that their nation was free of ‘the shackles’ of rationing, after only six months, whereas victorious Britain, suffered them for more than six years, as the UK was mired with socialistic regulation, presided over by the Clement Attlee’s Labour Government, at the time.
Europe grew at almost half the rate as the UK from 1999 to the present day and amongst the many reasons for this, was the extent of their regulation and bureaucracy, to which they are so pathologically addicted.
Swimming through Sago Pudding
Trading in Europe today (particularly France), is closer to ‘swimming through Sago Pudding’ and in the post Brexit era, the UK can now ‘cut themselves adrift’ from the mistakes of the past.
Clearly, we do not want a totally deregulated, economic environment i.e. ‘The Wild West’, but something between this and terminal suffocation has to be the order of the day.