There is much to welcome in the Government’s newly published ‘Benefits of Brexit’ white paper, particularly when it comes to regulation.
The direction of travel is certainly the right one – regulating only when necessary, involving business in ‘co-creating’ rules that affect them, aiming to become the ‘best regulated advanced economy in the world’, and keeping the cost of compliance as low as possible.
There are also a lot of small but important elements that we at the Centre for Policy Studies have called for – simpler reporting requirements for SMEs, growth objectives for regulators (a hugely important area) and free ports, a policy championed in a 2016 CPS report by the Chancellor himself.
There are however, two areas that concern me. The first is the lack of concrete targets.
The headline aim of the white paper is to ‘cut £1bn of business costs from retained EU red tape’. That’s a pretty meagre ambition when the overall cost of that red tape was estimated by the thinktank Open Europe at £33bn (a figure adopted subsequently adopted by the Leave campaign).
Similarly, the paper talks about bringing in sunset clauses, which would set a time limit for how long EU-era regulations will have effect. However, it refers only to ‘guidance to departments’ on when to use sunset clauses, without giving a clear idea how much regulation will potentially be affected.
On regulatory targets, we are told the Business Impact Target – a Cameron-era metric to assess the cost of regulation to businesses – will be phased out. Again, though, it’s unclear what the ‘replacement metrics and assessment’ will consist of.
The idea of a ‘one in, two out’ rule for new regulations has also been explicitly rejected, because while it would galvanise Whitehall, it’s too tricky to do given all the extra regulating we’ll be doing on new tech and Net Zero.
The point of such targets would be that if you are going to do all that extra regulating, you would need to cut burdens elsewhere – but Whitehall doesn’t seem that keen to lash itself to the mast. In other words, while this is all heading in the right direction, it’s not yet clear how ambitious the agenda will really be until, for example, we get those new targets.
The other issue that concerns is that it’s not clear who will be holding departments’ feet to the fire.
There’s lots of good stuff in the white paper about making sure regulations are actually working. Departments who fail to complete post-implementation reviews on time will face ‘additional scrutiny’, for example – but we don’t know who will be doing the additional scrutinising. This is important because one of the lessons from the many previous deregulatory drives is that you can’t leave departments to mark their own homework.
There’s an obvious role here for the recently established Brexit Opportunities Unit, perhaps turned into an Office for Regulatory Reform/Restraint along the lines of the Office of Management and Budget in the US. But to be effective it needs both a powerful position at the centre of government, and a powerful champion. At the moment the Unit is still in limbo following the departure of Lord Frost.
In short, this white paper outlines what could actually be a very good new regulatory system. The problem is that so much of the devil is in the detail, and it needs people at the centre who are pushing and pushing against departments’ (and ministers’) perennial drive to focus on shiny new rules.
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