Getting serious about red tape

Regulators

• All regulators to be independent of government and to report to the relevant select committees of the House of Commons.
• All regulators to return, so far as possible, to their original economic role leaving social issues to government.
• They should publish annual targets and performance against those targets.
• All regulators to have until 2017 to wind themselves up and be replaced by a combination of competition, self regulation and the OFT. The successor self regulation bodies to be independently chaired with a strong audit back up. If the deadline is missed, a new wind-up plan to be agreed with the select committee.

Creating new regulations

• All EU-sourced regulation to be challenged early enough for issues to be considered by UK Government, Parliamentary EU Scrutiny Committees and EU Commission.
• All non-EU sourced regulation via secondary legislation (i.e. by Statutory Instrument) to cease until a robust new system is in place, probably 12 months. Thereafter the relevant select committees to review their IAs, satisfy themselves that alternatives have been thoroughly considered and why the UK needs a regulation if the rest of the EU does not. In the light of that they should.
• Before this moratorium ends, all significant post-implementation reviews (PIRs) for 2000-2007 to be completed and published.
• ‘Sunset’ clauses and PIRs required for all new UK-sourced regulations. In the case of EU-sourced regulation, sunset dates to be recommended.
• The regulatory quangos (specifically the Sub-Committee of the National Economic Council , Regulatory Policy Committee and the Local Better Regulation Office) to be wound up.
• SIs to distinguish legislative (regulations) by numbering and paper colour.

De-regulation

• A blanket “sunset clause” for all non-EU regulation department by department three years from onset of the clause. Better Regulation Executive to assist in the process of sieving out regulations to be retained following the above procedures. See BCC Déjà Vu report.

Implementation and supervision

• Small and medium-sized companies to be allocated one stop shops, if they wish, for all inspections and interpretation of regulation - analogous to the Primary Authority concept pioneered by LBRO for multi-location companies.

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getting-serious-about-red-tape

The British Chambers of Commerce’s latest report on regulation, co-authored by Adam Smith Institute senior fellow Tim Ambler (here wearing his London Business School hat), was released yesterday. According to the Financial Times:

It urges parliament to recover its role in controlling legislation and be prepared to reject rules that are too burdensome… It says the UK needs the equivalent of the EU’s impact assessment board, a committee of senior officials that sets standards and rejects impact assessments that do not meet them.

Sensible stuff, especially when you consider that the cost of regulation to business is now somewhere in the region of £80bn – or 6 percent of GDP – according to the Institute of Directors. Similarly, the BCC’s ‘burdens barometer’ is due out soon, and is expected to show an increase on last year’s £77bn.

So what to do about it? Well, as Tim told the FT, none of the political parties have particularly impressive plans to deal with red tape. Fortunately, however, the ASI has its own plan, which was outlined by in our 2006 report “Roadmap to Reform: Degulation”.

That report makes the case that we need an entirely new approach to regulation. As the authors note in their executive summary:

Government’s goal should not be ‘better regulation’. It should be freer and more competitive markets so that business can become more responsive to its customers and the needs of society as a whole. This is more likely to be achieved by a few general rules of good conduct and the marketplace, than by thousands of pages of detailed prescriptions.

More recently, Tim produced a ‘Manifesto for a new government concerning regulation’ for us. Below is 13-point summary of its recommendations. Click here if you can’t see it.