Analysing Britain's regulatory burden
As the UK leaves the EU it will adopt an independent regulatory policy with the ability to repeal and amend EU rules, and to introduce new regulations in fields of EU competence. This freedom will have to be exercised within the parameters of international commitments such as WTO rules, free-trade agreements (including whatever is agreed with the EU) and other international agreements. It will also have to be done in full consideration of the impact on trade with the EU that will come from diverging at a national level from its regulations. Additional consideration needs to be given to the impact on Northern Ireland, which will remain bound to EU goods regulations at least until 2024 when it will have the option to vote to exit that arrangement.
Regulation has been a tool of EU integration. The implications of this driver being removed from UK regulatory policy should not be underestimated. The former Chancellor of the Exchequer signalled the government’s intention to ‘liberate businesses’ from the ‘overbearing bureaucracy’ of EU laws and design ‘smarter, more flexible regulations’.1 But apart from the Brexit aspect, this sounds sadly familiar, and calls to mind similar rhetoric and initiatives of successive governments since at least the 2000s, including the then Chancellor himself when he was Business Secretary.
There is no doubt though, that regulation is a major source of concern for businesses, although the concerns tend to differ between the strategic interests of larger businesses with legal and lobbying firepower, and small and new businesses for whom the costs of regulation represent barriers to entry and growth. The perception that unelected officials in entrenched positions are enforcing rules that only seem to increase in scope and prescriptiveness whichever party is in power, contributed to the feelings of dissatisfaction that led British people to vote to leave the EU in 2016. There is a risk now, with EU laws being transposed en masse into UK law and regulators pouring cold water on suggestions of reforms, that the innate stickiness of the regulatory state will assert itself and the opportunity for meaningful change will be lost.
The Regulatory Affairs Programme will examine regulators and regulation across a range of sectors and test the performance of the UK’s regulatory measures and institutions. This will help in understanding the scale and scope of regulators’ powers and where they are operating effectively, as against their own remit and in objective terms. It will provide both an empirical and normative basis for challenging existing regulators and regulations.
We start this paper with a high-level review of regulation as a concept, and set out the principles that will underpin the work of the programme. This will be followed by a series of studies of regulation in specific cases, covering particular commercial activities such as financial services and energy, economy-wide or horizontal regulators such as the Competition and Markets Authority (CMA) and the Information Commissioner’s Office, and civil society regulators such as the Electoral and Charity Commissions.