What the Grenfell tower fire means for economic policy

All good ideas and good policies become bad ideas and bad policy when taken too far. This is true as much in politics as it is in business and in our personal lives.

There is little doubt that a degree of austerity was necessary following the 2008 financial crash. Without it, the country may well have gone bankrupt. Similarly, over-regulation has the ability to clog up the whole system and must be avoided. But those are very different from austerity and de-regulation becoming ideological obsessions and taken to extremes.

We don’t know the full story yet. But it seems possible that both cost-cutting and inadequate regulation against expert advice played a role in Grenfell Tower. The tragedy has been very visible. But there are doubtless millions of other small tragedies that arise daily from the same extreme policies yet go unnoticed except for the people suffering the consequences.

In the wake of Grenfell Towers, it would be foolish to limit the re-examination of policy to fire and building regulations – essential though that is. The reality is that for the past decades, Britain has built its whole economic model on the shaky foundation of a low-cost, de-regulated environment. This was also Theresa May’s vision of post-Brexit Britain – a cost and regulatory haven off the coast of Europe.

British business has also been infected by the same virus. At a recent meeting with senior business leaders, I was excoriated by some because I suggested regulatory intervention in one particular area. Opposition to any form of regulatory intervention has become automatic and thoughtless.

Politically, Grenfell Tower may well spell the end of the effectiveness of the “red tape” and “living within our means” sound bites. For those on the right, this pulls from under them crucial pillars on which their whole brand was built. But, more important, it gives the lie to the effectiveness, resilience and sustainability of the whole British economic model.

Working to have a new model emerge is a task that now needs to be taken on.

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.

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