IEA Director of Public Policy and Communications Matthew Lesh has written for The Spectator on his new research highlighting the costs of red tape in the form of higher prices.

Matthew wrote:

“The prices of goods and services in sectors where the government has intervened the most through regulation and subsidies have seen the biggest increases: electricity (up 425 per cent), housing (up 254 per cent), and childcare (up 193 per cent).

“Regulation imposes significant direct compliance costs on businesses. Regulation also creates often unseen barriers to entry for newer and smaller firms that cannot afford to comply, reducing competition and innovation. This together means higher prices for consumers and weaker economic growth. One study found that a 10 per cent increase in regulation is associated with price increase of around 0.7 per cent, while a World Bank assessment found that it decreases economic growth per capita by 0.5 per cent.

“The impact is particularly felt by lower-income households, who tend to spend a greater proportion of their incomes on highly-regulated goods like housing and electricity.”

Read Matthew’s full piece here.

You can also read a copy of Graphic Content: How red tape is fuelling the cost of living crisis here.