Article originally published on The Times website.
The high political drama of Brexit has obscured a striking new reality — that the vast majority of regulatory powers once held by the European Union have been passed, quietly and with little fanfare, to our domestic regulators.
Angry columns about bureaucrats in Brussels increasingly will be replaced by angry columns about Threadneedle Street, the Financial Conduct Authority, the Prudential Regulation Authority and the Competition and Markets Authority, Ofwat and Ofgem, the Environment Agency and Natural England. For the public, it seems that little has changed. The same old complaints. The same old restrictions. The same old hand-wringing and excuses, bringing little to no impact to our daily lives.
Something significant has changed, however. With these powers now onshored in the UK, we can actually do something about the problems. We can adapt the rules that we don’t like, empower the right people to do the right things and bring those distant regulators just a little closer to home.
The regulators that shape the British public’s daily lives are far too often black boxes — inscrutable institutions offering little explanation of their decisions. It can sometimes be difficult to tell if a decision has been made in pursuit of a clear goal or if regulation is simply the unforeseen side-effect of a decision made elsewhere. Nor is it always clear if multiple regulators are communicating effectively in pursuit of shared goals. Businesses that fall under more than one regulatory remit often express frustration that those involved do not share information, duplicating work and causing confusion.
This is exactly why we are calling for parliament to take on a greater role in the scrutiny and oversight of our regulators. We envisage a new, dedicated regulatory oversight committee made up of MPs and peers, equipped with the powers to launch investigations into regulators and act in the interests of the public that parliament exists to represent.
This is necessary for several reasons. The shortcomings of our existing regulatory framework, even before Brexit, were increasingly evident to parliament and the public. Rip-offs, interminable and labyrinthian online transactions, an apparent lack of preparedness for the energy shock and, above all else, the often-inadequate explanation for regulatory decisions show that better performance is essential.
Second, the constraints on select committees’ time means that they are often unable to conduct the thorough scrutiny that members would like to see and the public deserve. A new joint committee, staffed by members from both Houses of Parliament with the necessary expertise and supported by a sizeable, dedicated research staff, would have this time. This is an essential response to patchy regulatory performance. Alongside a new committee, perhaps a fully fledged independent body modelled on the OBR will be needed.
Third, while select committees do admirable work in holding to account regulators within their remits, no body exists to oversee cross-cutting issues such as the regulation of emerging technologies that exist beyond a single sector. The present system simply does not take into account how regulators interact with one another, to the benefit or detriment of the public.
Until such a system is in place, there will be little certainty on how to navigate the future regulatory framework or how regulators themselves manage trade-offs between their statutory goals or neglect them. We do not know how often regulators find themselves working at cross-purposes, nor how they manage this situation if they do. With a broader remit, a new committee could more effectively address areas of overlap and conflict between regulatory objectives, reducing burdens for businesses and enabling greater feedback.
We must return to the market-based principles that originally underpinned our regulatory framework, one that was designed to embrace the energy of the entrepreneur and of the private sector.
Parliament must now take a leading role in this process. Better outcomes for all are essential.
