A House of Lords Committee has warned that without further guidance, regulators could fail to meet the Government’s call for them to facilitate innovation and growth, potentially driving new investment away from the UK.
It said that this failure could come from a combination of “unclear guidance, legislative restrictions and the need to balance growth” with their other duties from Government.
A report titled ‘Time is money: How regulators can support growth‘ has been published as the cross-party House of Lords Industry and Regulators Committee calls on the Government to give clear guidance to regulators on trade-offs between supporting economic growth and their other responsibilities, such as consumer and environmental protections. The Committee stated that regulators needed to “provide speed and certainty in their decision making” to help businesses make investments.
The Committee has also urged Government to:
- Provide political cover where it wants a regulator to be more open to risk
- Legislate to ensure the regulatory framework can adapt to new technologies, products and services, if necessary through a Regulatory Reform Bill
- Estimate the extent to which the Government’s Action Plan will reduce the actual cost of compliance with regulation, rather than just the administrative costs of regulation
- Work with regulators to identify where lead regulator models could be implemented more broadly and speedily, including across departmental boundaries
- Ensure sponsoring departments have suitable metrics to hold regulators to account for their pace and the outcomes of their work
The Committee has called on regulators to:
- Speed up their internal processes to reduce delays that make the UK a less attractive prospect for investment
- Proactively engage with industry to ensure companies know what is required of them
- Make use of tools such as regulatory sandboxes to test innovative products, services and technologies
Chair of the Committee Baroness Hayter said: “The Government says economic growth is its number one aim and wants regulators to help facilitate this. Our inquiry found that, for this to happen, Government itself must take difficult decisions on how regulators should balance economic growth with the protections that citizens and the environment rely on, and the levels of risk to which the public should be exposed.
“Regulators must play their part by performing their functions more effectively, providing the speed and certainty businesses need to make investments, and the flexibility to respond to innovation.
“If growth is the Government’s priority, it must provide clarity to regulators about its expectation and the political coverage for them to be less risk averse. The time to act is now.”
Food regulators welcome report
Responding to the Government’s plan for growth, Katie Pettifer, chief executive of the Food Standards Agency (FSA), told the Committee that it was “great” that the growth agenda meant it was getting more engagement from the Government. Pettifer also stated that “ministerial interest in reform” had been “really important” in getting “access to legislation”, explaining that FSA had been “plugging away for years” at some of the reforms now being taken forward as “overhauling the regulation of food standards” had never been a priority area for Government.
While discussing how regulators can provide guidance or support, Pettifer said that FSA was trying to develop guidance that demonstrated “the approach it will take to determine that something is safe”, which she said was “quite a good model where you have legislation that is relatively principles-based but the regulator can set out guidance in some detail for businesses, because that can be changed easily as time passes and as technologies develop”.
In the report, multiple bodies called for effective communication and collaboration between regulators, suggesting that lead regulators could provide a “single front door” to give businesses a single point of contact to manage the regulatory relationship and information they need for approving a project. The Food and Drink Federation (FDF) argued that this “single agency approach” to border enforcement, which is currently split between several authorities, would reduce duplications, delays and burdens.
