Labor plans more than 60 regulatory increases that would saddle businesses with tens of billions in extra costs, an analysis shows.
The Institute for Economic Affairs (IEA) said Labor would increase red tape in a range of areas, from accelerating the ban on petrol cars to imposing energy efficiency standards in rental properties.
In a briefing shared with The Telegraph, the IEA said the manifestos of the two main parties propose “comprehensive regulatory measures”.
But while there has been “significant public discussion” about each party’s tax and spending measures, it said there was “a lack of research into the business impact of proposed regulatory changes”.
According to the think tank’s analysis, Labor has proposed 62 policies that would increase the regulatory burden on businesses and 13 that would reduce it.
The IEA said Labour’s regulatory measures were “likely to have more significant costs and potential benefits” than the party’s five tax hikes, which have cost Labor at £8.5 billion a year.
Labour’s new ban on fossil fuel cars
The think tank meanwhile counted 29 measures in the Tory manifesto to increase regulation and 20 that would reduce regulatory burden.
While the IEA said it was “impossible to fully analyze the different proposals and benefits”, not least because many of the measures were “lack of detail”, it said the costs were likely to be significant.
For example, the Center for Economics and Business Research has estimated that Labour’s policy to reinstate the 2030 ban on the sale of new petrol and diesel cars will cost an estimated extra £1,000 per household per year between 2022 and 2050.
For Labour’s policy to require private rental properties to meet minimum energy standards by 2030, a government impact assessment found the measure would cost £12.2 billion.
Another impact analysis of the Renters (Reform) Bill – the legislation banning no-fault evictions that both Labor and the Tories are committed to – suggested it would cost businesses £1 billion.
The IEA said the list of new regulations relates to operating costs and not “the way the government runs itself”, meaning, for example, the Tories ban on mobile phones during the day at school is not included in the lists. The list also lacks measures relating to individual criminal law or tax proposals.
Caffeine drink ban for young people
New regulatory burdens in Labor’s manifesto include banning high-caffeine energy drinks for under-16s, banning dismissals and rehiring, applying the minimum wage to all age groups and introducing reporting requirements for wage differences based on disability and ethnicity.
The new regulations would impose costs in several ways, with some requiring companies to spend more on new buildings or increasing labor costs, while others would impose additional paperwork.
Tory rules include the party’s plan for a ‘Pumpwatch’ programme, which would require petrol retailers to share live information on prices, and a ban on new waste incinerators.
Matthew Lesh, IEA director of public policy and communications, who wrote the analysis, said: “We have heard a lot about taxes and spending promises during this election campaign, with the expectation that fiscal policy will pay the full price.
“However, neither party has made any attempt to calculate the impact of their much more numerous regulatory proposals. Britain’s prosperity depends not only on the way the state taxes and spends, but also on the myriad ways in which it controls our lives and restricts business activity.
“There are some commendable proposals from both major parties, particularly on reforming the planning system to enable housing development and accelerate the delivery of infrastructure.
Terrorism prevention for nighttime locations
“However, the manifestos released last week also include dozens of policies that together impose tens of billions of pounds in costs. This will inevitably lead to higher prices for households, hindering entrepreneurial innovation and lower wages for workers.
“Despite Labour’s new moderate and sensible image, their manifesto is loaded with significant new regulatory proposals, ranging from a permanent ban on fracking to expanded equal payroll taxes and tough energy efficiency standards for rentals.
“While well-intentioned, these policies impose significant burdens that cannot be overlooked.
He added: “The Conservatives have proposed fewer measures compared to Labour. However, some, such as mandatory terrorism prevention plans for nighttime locations, will pose significant new challenges.”
A Conservative spokesperson said: “Our Smarter Regulation program – launched just over a year ago – has already saved businesses 50 million hours of administrative time, saving them an estimated £1 billion.
“We have scrapped or reformed 2,000 EU laws since Brexit and are on track to repeal or reform more than half of the 6,000 laws we inherited in our 47 years in the EU.
“And we will go even further – abolishing existing EU nutrient neutrality rules to immediately allow the construction of 100,000 new homes, excluding more companies from the scope of burdensome reporting requirements and creating a highly attractive business environment through the creation of more Freeports. ”