Well, yes Ritchie

But this does not just apply to pensions. It also applies to tax. And corporate reporting. And the environment and so much else.

But this requires three other things.

The first is that business should realise that regulation exists for a purpose.

The second is that they should stop the talk of the burden on business: fair competition that does not leave innocent victims behind is not a burdensome activity; it’s a necessity, but so are the rules that let it happen.

Third, the law should be enforced and right now in tax, company law and I am sure many other areas that is not done because of a lack of resources and a importantly a lack of willing on the part of a government that doe not really believe in its own role.

Business ethics are vital. But so is the rule of law.

Care to point out which laws have been broken?

14 thoughts on “Well, yes Ritchie”

  1. The second is that they should stop the talk of the burden on business: fair competition that does not leave innocent victims behind is not a burdensome activity

    1. Define “fair”?
    2. His premise fails to justify his conclusion.

  2. Bloke in North Dorset

    It’s not regulation per se that’s the problem, it’s the purpose. If it’s to raise barriers to entry, fir example, then it is a big problem.

  3. I’m not sure the incentives are fully aligned though with the pensions protection fund in the picture. In theory I can employ a bunch of staff on lower wages with a promise of a larger pension, make a profit through neglecting the pension fund, exit with my cash and leave the pension protection fund to sort out the shortfall which could be larger than the profit I’ve made.

    Not suggesting this is exactly what happened with BHS but seems a potential flaw that doesn’t seem like a good idea

  4. “The second is that they should stop the talk of the burden on business: fair competition that does not leave innocent victims behind is not a burdensome activity; it’s a necessity, ”

    Nonsense.

    Regulation does impose costs; it can increase prices to consumers and can have deadweight costs for society. To say we should ignore these is ridiculous.

    Yes, regulations can bring benefits too, so there’s a cost-benefit analysis to be done.

    What benefits does this regulation bring? What costs (direct and indirect) does it involve? Do the benefits justify the costs? If not, then we shouldn’t have it.

    Then, if the benefits exceed the costs, we can go on to ask whether the costs fall in a way that is “fair”. Often it doesn’t, because the costs fall more heavily on small businesses than large, and can be used to create barriers to entry. Sometimes they compliant bear the costs of the non-compliant. But we shouldn’t even need to consider that until it’s first passed the cost-benefit analysis.

  5. @Andy H

    It’s the job of the trustees and the scheme actuary to ensure the pensions are properly funded. In theory they’re both independent, but (like anyone else) they may be cowed by a ‘forceful’ personality, such as Cap’n Bob.

    It’s a lot more difficult to carry out such shenanigans with a modern defined contribution scheme.

  6. “fair competition that does not leave innocent victims”

    Fair competition, even by his weird definition, often leads to bankruptcy. I gather he feels the suddenly unemployed who formerly worked for the failed competitor are guilty of something. And the creditors, including customers whose service contracts and warranties are suddenly worthless.

  7. I sneeze in threes

    Is retained profit attributable to shareholders after any pension charge (actuarial loss) in other comprehensive income? If so then issuing a dividend for the full retained profit would be allowable, just a bit shortsighted or asset strippy

  8. Bloke in Costa Rica

    It’s Murphy’s usual confusion between lex lata and lex ferenda (since it’s annoy-a-bureaucrat-with-Latin week in these parts).

  9. So much wrong, so little time, so let’s just go with:

    “The first is that business should realise that regulation exists for a purpose.”

    People in business don’t need goldfish-brain to tell them that, it’s a truism. The real questions are whether that purpose is desirable, whether the regulation achieves its purpose, and whether the cost of the regulation is acceptable.

    Can’t imagine why they don’t want him on Team Jezzer.

  10. ~1993, Hillary the Clinton, when people complained of the cost of Hillarycare, said, “I can’t help it if some companies are under capitalized.”

    Fascist dirigisme begets monopolies. Big companies (Dupont, GE, for example) realized that fighting back doesn’t work, but they can adapt to the burden while their small competitors can’t. So they go along.

    Corporations have no incentive to fight; it is in their best interest to go along with autocratic government directives.

    Dupont fought the Freon ozone hole absurdity, and got creamed by the press. They learned from that to just go along with what the government says.

    As BiND says, regulation becomes a barrier to entry for competition.

  11. BC, I dunno – will Labour ever reach peak cunt? Maybe it’s just that Ritchie insists on being cunto di tutti cunti and the spot’s taken.

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