Salocin

Regulation Costs

It there to make you safe - it's put in place, maintained and enforced by your elected representatives, and it gets in the way of everything that you do. People have lamented its existence since the dawn of paper, and a collection of new terms have evolved to deal with its existence.

Red tape.
Bureaucracy.
Process.

To some this is an incredible burden (as I am discovering, to my cost). To others, this is an opportunity to make money for nothing.

I will illustrate with two examples.

I recently bought 10 classical music CDs. Classical music is complicated, you can't just buy Brahms String Trios. There are dozens of recordings, in dozens of different venues, with different trios of differing qualities and characteristics. Suffice it to say that when you're buying classical music, you know the CD you want, and it's not always available.

We in the old world like to think that we've got the monopoly on class, culture, civilisation and the finer things in life. So it may come as a little surprise that I had to order most of the CDs I wanted from the United States. They came in two packages delivered by international post.

I got two cards through the door and I had to go pick up the parcels at my local Post Office depot. That's a long story that involves shouting, roadworks and buses, and is best left for another time. What's important is that these cards indicate that I owe a little over £30. I was under the distinct impression that I had already paid for these CDs.

Upon arrival, a red sticker on the side of each parcel breaks down the cost for me. First there's the UK extracting it's pound of flesh by charging VAT (you're not American, and you live on an island, so pay up). But 17.5% multiplied by the cost of my CDs doesn't come anywhere near £30. The remainder is £8 per parcel of "post office customs management charge" or something similar (I don't have the labels, their very presence being so nausea-inducing).

£8 per parcel, to cover the costs of administering a £5 tax. Good money if you can charge it - especially since the consumer, by the time he faces this bill, has already paid for the goods in question and the post office is holding them hostage pending payment.

The artificial red tape that exists in affairs of importation and customs serves the dual purpose of raising revenues for the government and buttressing the overweight buttocks of the post office as it struggles it's corpulent rolls of fat up the mountain of capitalism. If I'd paid extra to have it shipped express, DHL or someone would have charged me for the VAT, extra for having it over the Atlantic in two days, but probably no special administrative charge, which would have made the entire thing the same price and would have had my CDs on my kitchen table in a fraction of the time.

I hate red tape.

Example number two is to do with my flat. I am trying to rent it out at the moment. I've found tenants, they seem nice, I'm going to rent the flat to them and get it all done as soon as possible. The problem is the rules and regulations I now have to contend with. A couple of illustrations...

The gas boiler needs a certificate of safety - so I call the local agent for my boiler, and ask them to service it and provide a certificate of safety at the same time - surely they can do that... Surely?

Apparently, there's a whole profession around certifying gas boilers - the people who do the safety inspection are not qualified to service the boiler, and the people qualified to service the boiler are not qualified to certify its safety. When Adam Smith had his big idea about the division of labour, he did not intend for two people with essentially the same skills to double their collective workload and charge unsuspecting punters twice. That the law is the source of their ability to do this adds insult to injury, especially since it adds absolutely no value to the public.

I also have to register with a deposit agency, because landlords are apparently not to be trusted with the deposits of their tenants (meanwhile, their tenants are untrusted with a property worth hundreds of thousands of pounds!). This additional requirement has spawned an entire additional two pages to the contract for a shorthold tenancy, and added a good 10% to the hassle of renting one's flat. I still need to get the inventory done, the movers to get my stuff out and the special form that allows me to not have tax collected at source for my property while I am abroad. The amount of paperwork involved would give a rainforest an anxiety attack.

The entire property industry is contorted around these (and other) rules, with some people making money from them and others losing money from them, but the value they add remains deeply questionable. In effect, they act as a disincentive to rent a property, and consequently as a brake on the economy. By reducing the incentive to rent a property, they also reduce the number of properties on the market, thus artificially inflating the price by exacerbating the demand/supply mismatch.

The red tape is not my friend.

Posted by nlvp at May 6, 2007 12:16 PM