Adam Smith Institute

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How do you say 'paternalism' in Welsh?

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Where is state regulation going to end? The Welsh Assembly has made fire sprinkler systems compulsory in all new homes. It argues sprinklers will save lives, including those of firefighters who have to go into burning buildings to rescue people. No doubt it will; around 20 people a year die in fires in Wales, though this includes fatalities in workplaces too. Still, most fires are caused by misuse of equipment or faulty gas appliances, so better training and gas inspection might do more good.

Like all regulations, though, the benefits are clear and the costs are harder to see. And the benefits of those promoting the regulation are more concentrated than the rather diffused costs that everyone else suffers. That's the problem with regulation. For those with a concentrated interest in a regulation, a bit of time and money invested in lobbying can pay off manyfold. It is easy to see why fire fighters, and companies who make domestic sprinkler systems, might campaign for this particular law.

But there are costs as well. Fitting sprinkler systems is an expensive extra on the price of a new home, at a time when people are struggling as it is to afford housing. At the margin – and all decisions are made on margins – some people will be unable to buy a new home, or will have to stay longer in overcrowded rented accommodation, than before. Problems with water supply – think of leaks and burst pipes – can actually ruin all your possessions and make your home uninhabitable, so the regulation poses a risk to homeowners as well. And so on.

There is no limit to what regulations a government could impose in order to make sure we all sleep soundly in our beds and no harm befalls us. But all regulations have costs and usually they end up doing more unseen harm than they do eye-catching good. People are not daft: is it not better to let them decide the balance of cost and risk for themselves, rather than force everyone, from the most risk-averse to the most reckless, to accept the only standards allowed by by a simple majority of representatives chosen by the minority of the people who happened to turn out on election day?