Glaring contradiction at heart of government growth agenda
In the Enterprise and Regulatory Reform Act of 2013 (stay with me) the Competition Commission and the Office of Fair Trading were abolished, and in their place emerged the Competition and Markets Authority. The 2013 Act enshrined the regulator’s remit and responsibilities, with a hefty focus on protecting consumers. On the CMA’s website, they summarise their roles as helping “people, businesses and the UK economy by promoting competitive markets and tackling unfair behaviour.”
Now, as part of the government’s rather haphazard push to get the economy growing, ministers want the CMA to focus more on using (or not using) its powers to promote growth.
The implication is that the Chancellor and her officials feel the regulator has been getting the balance wrong; focusing too much on regulating business activity and not enough on enabling or supporting GDP-boosting deals.
The CMA isn’t alone in facing ministers’ impatience; the Treasury has written to all known regulators covering everything from roads and broadcasting to financial stability, asking for more of a pro-growth swagger, but it seems that the CMA has taken the brunt of the fire. The watchdog’s chair, Marcus Bokkerink was shunted out by ministers who, evidently, did not care for the cut of his jib. Rachel Reeves told a Davos audience last week that he left after favouring a “different approach” from the government.
While I’m instinctively in favour of smart deregulation, when it comes to this government’s near messianic focus on regulators’ ability to drive economic growth I think it’s fair to question both their method and their motives.
On the former, it’s fair to say that some eyebrows are being raised by the government’s approach, which critics could present as a barrage of interference in independent agencies while stopping short of a legislative rewrite of their mandates. As for ministers’ motives, this much is clear: six months into their term, growth has completely eluded them.
Perhaps this wouldn’t have been the case if they’d subjected their own policies to the same growth-tests they’re now forcing on the regulators. The government’s impact assessment of their reforms to employment rights, for example, pointed to billions of pounds of additional costs for very little gain. If a growth-focused regulator had been asked to review that legislation, they’d have thrown it out.
The contrast between the government’s own burdensome regulations and policies – whether on energy, employment law or even football – and their current enthusiasm for clipping regulators’ wings is at best confusing and, at worst, nonsensical.