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We need to do something about bunged-up Britain

Jeremy Clarkson has become an unlikely hero after his turn in Clarkson’s Farm, which follows his hapless attempts to work the land on his Cotswold property. And not just to petrolheads or even beleaguered farmers, but to everyone who simply cannot get anything done.

The TV host’s battle to operate a shop and open a restaurant, thwarted at every conceivable turn by local planners, saw him eyeballing a lengthy list of bodies, quangos or agencies that had to opine on his proposals.

The UK has hundreds of these arms-length bodies — some of which count as regulators, most of which do not. In total, they spend about £265bn of public money a year and employ 300,000 people (figures that include the NHS and a lengthy tail of tiddlers), according to a report on regulatory reform published on Tuesday by a group of Conservative politicians led by Bim Afolami and a cross-sector business group chaired by Pension Insurance Corporation chief executive Tracy Blackwell.

Here we go again, you think. More frothing about the evils of red tape, the impossible burden on business and the joyous opportunity of Brexit to fix it all. UK thinking about regulation has tended to obsess about volume, with one-in, two-out type strictures, combined with promises of a bonfire of rules — from the coalition government’s Red Tape Challenge to the push to purge EU rules in disorderly fashion from the statute book.

But this group is less preoccupied with the rules themselves (excessive regulation is only one of 11 possible issues raised with the system) and more with whether the system functions anywhere near effectively.

There is no real clarity, it concludes, over which bodies count as regulators and which do not, or who should make rules and on what basis. Then there is little governance across the entire system, in part because some was outsourced to Brussels over decades. Its proposals include a joint committee in parliament to monitor the work of all regulators, a new Cabinet Office operation and a new “accountability framework” to measure performance.

It is mildly depressing that a problem rooted in the proliferation of bodies, task forces and endless consultations provokes a remedy that feels like more of the same. But there is some justification here: this is a cross-economy version of the debate already being had in the financial services sector, where the transfer of vast rulemaking powers from Brussels to UK regulators has prompted questions about how to vet their work.

While it is a bad idea to create sector-specific watchdogs that simply offer lobbyists another way to needle regulators, a domestic system of independent regulation will ultimately require more detailed, expert democratic scrutiny and better direction from government.

Looking economy-wide might help reduce special pleading. It might even improve co-ordination. John Fingleton, former boss of the Office for Fair Trading, pointed out in a speech last year that while the UK had been successful in increasing investment in offshore wind it had totally failed to boost spending in the infrastructure needed to transport that energy and balance the grid.

Fingleton’s speech also highlighted that the post-privatisation system of price regulation had been meant to “wither away” after a few years as competition increased. But decades later, a system preoccupied with short-term price setting has starved sectors such as rail, energy, water and telecoms of investment. Instead of becoming unnecessary, regulators have had more issues and problems added ineffectually and confusingly to their remits.

The challenge for Afolami’s group will be to show how its version of accountability can make things better rather than worse. Part of the problem has been a retail focus by politicians who value keeping customer bills low over long-term investment goals, like a modern energy system or clean beaches. Another is regulators’ wariness of getting mauled in parliament and the press when things go wrong. Call it the CYA problem: more accountability can mean more report writing, more risk aversion and less useful change.

But the challenge is growing: the energy transition means vast amounts of both rulemaking and investment. The latter requires long-term predictability and freedom from political meddling. Businesses in many sectors have a version of the same complaint about gummed-up, process-heavy systems and an inability to move fast. Rather than a fruitless quest to deregulate, this report has the virtue of posing the right questions. Just ask Jeremy.

helen.thomas@ft.com
@helentbiz

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