The Business Exchange Bath & Somerset Issue 4: Summer 2017 | Page 9

MIND THE GAP!
by Dick Jenkins, Chief Executive of Bath Building Society
Election talk on the economy has once again raised the problem of the
productivity gap in the UK. Statistics show that productivity has broadly
plateaued in the UK in recent years while in other developed nations it has
marched forward. There are probably a range of reasons for this and doubtless
the much- discussed “failure to attract inward investment”; as a result of Brexit
uncertainties, is currently having an impact on productivity.
But there is another elephant in the room...
As a leader in a highly regulated business sector, I see every
day the impact on productivity brought about by excessive
regulation and the compliance burden it brings.
Don’t get me wrong, I’ll be the first to say that the so
called light-touch r egime in the Financial Services sector in
the run up to 2007 did the industry and its customers no
favours. I wouldn’t want a return to that. But following
the Financial Crisis the pendulum has definitely swung
the other way and now we are all overburdened with
regulation, even the good guys who always played by the
rules, and that has to be increasing the productivity gap in
our economy.
It’s a very difficult thing to measure, because of the
pervasive effects of regulation on all aspects of business
but I would estimate that regulation in one form or
another is tying up 20% of the manpower in my business.
But it goes beyond that.
In a regime of intrusive regulation when the regulator
draws a line, human nature is such that a business will
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draw its own line on the conservative side of the regulators
line to give itself the margin of safety. After all, it doesn’t
want to be seen as pushing the boundaries. All well and
good, and; in my industry, amongst many others, it’s hard
to argue against prudence. But where it gets interesting
is where that prudence adds aggravation for customers
or excludes them from products which would be useful to
them.
Surely that’s the point where the pendulum has swung
too far? So who’s to blame?
Well, regulators must get real about the true impact of
regulation on the economy. But firms must do a better job
of arguing for more proportionate regulation and must be
careful not to ‘gold plate’ the rules that they are set. It’s
a bit like chucking the food out of your fridge a few days
BEFORE the sell by date!
Dick Jenkins, Chief Executive of Bath Building Society
@BathBuildingSoc
05/10/2016 17:17
05/10/2016
17:17 9
THE BUSINESS EXCHANGE
2017