MPs urge government to escape ‘regulation by default’
Ministers should overhaul the government’s approach to regulation as adding new rules has become an “easy” tool, according to a report backed by MPs from across the political spectrum.
Researchers at Re:State, a non-partisan think tank focusing on growth and Whitehall governance, said justification for new red tape should have a higher bar and be reviewed at regular intervals in order to minimise detriments felt across the UK economy.
Its report, ‘The Law of Rule’, calling for greater accountability of new rules and sweeping reforms to the regulatory framework was praised by senior MPs in each of the four biggest parties.
Shadow chancellor Sir Mel Stride, Liberal Democrats Treasury spokesperson Daisy Cooper, Reform UK’s Richard Tice and Treasury Committee chair Dame Meg Hillier, a Labour MP, praised the report for raising key points about Whitehall and “regulatory drift”.
“Too often the cumulative (and sometimes competing) impact of regulations on businesses or citizens is not well thought through, or even understood, in Whitehall,” Hillier said.
Joe Hill and Cory Berman, the authors of the report, argued that the government was falling for the same trap of “ambitious rhetoric” on cost reductions followed by the implementation of a “steady flow of new regulatory proposals”.
The report said any regulatory regime should aim to be proportionate and minimise overall harm to the wider UK economy.
It argued that regulatory reform policy should fall within the Cabinet Office, along with bodies including the Regulatory Innovation Office and the Regulation Directorate, while a minister should be directly responsible for the role.
It also said there should be clearer targets for cutting burdens on businesses and consumers while the government should set out clearer budgets for different quangos.
Fears over regulation scrutiny changes
The tweaks to Whitehall operations and arms-length bodies would represent a radical change in the government’s approach to red tape and analysis of rules’ effectiveness.
Business groups have raised concern about the possible scrapping of the Regulatory Policy Committee (RPC), a quango that scrutinises red tape.
Writing for City PM, shadow business secretary Andrew Griffith said any efforts to dismantle the body would be “undermining the UK’s reputation as a stable, predictable environment for investment”.
Re:State’s report called for the body’s work on scrutinising rules to be strengthened as it had saved businesses billions of pounds a year.