Review of House of Lords consultation responses
The Institute of Regulation responded in December to the House of Lords inquiry on regulation. So did 90 other individuals and organisations. You can find the written responses, including the Institute’s trustee response here. What follows is a flavour of some the other responses to the Lords’ consultation. Lord Hollick, the Chair of the Committee when the inquiry took place, has now stepped down from this role. We will liaise with his successor when appointed and we will be sure to socialise the report and findings when issued by the Committee.
Of the 91 consultation responses, 16 were from individual regulators, ranging from those regulating mainly commercial businesses, such as Ofgem, Ofcom, the Financial Conduct Authority (FCA), the Competition and Markets Authority (CMA) and the Health and Safety Executive (HSE), through to the regulators of charitable and public services, including the Charity Commission, Ofsted and the Care Quality Commission (CQC).
There were also responses from industry representatives, such as Water UK, Energy UK, and Universities UK, as well as individual firms, including Southwest Water, National Grid and Hitachi. Two government departments, for Business and Trade and for Education, also responded, as did the unions Unite and Prospect. Charities including Surfers against Sewage and Unchecked UK also submitted responses. There were also contributions from academics, including Robert Hazell of UCL and Julia Black from the LSE, and from lawyers at Slaughter and May and MPs on the Regulatory Reform Group.
There was a degree of consensus in some replies that, as Unchecked UK put it, “Empowered and well-resourced regulators are essential to maintaining public trust, promoting fair economic growth and protecting the environment. When regulators do their jobs, law-abiding businesses prosper and public trust in the market increases. Competent regulators with sufficient resources signal that the government takes its duty to protect people and the environment seriously. Confidence in oversight allows markets to thrive with the full faith of consumers, employers and investors.”
On regulatory governance and accountability, individual regulators highlighted their own arrangements, with some responses referencing the 2019 report on regulation from the National Audit Office, on how regulators should be accountable to Parliament directly or through their sponsor minister, or both. Their own good practice was highlighted, and the complex nature of their own stakeholder environment, with often competing demands, was noted.
Some responses, including the Institute, highlight international good practice in regulation. The CAA references the six expected outcomes of the Australian Regulator Performance Framework:
Regulators do not impede the efficient operation of regulated entities, without necessity.
Communication with regulated entities is clear, targeted, and effective.
Actions undertaken by regulators are proportionate to the regulatory risk being managed.
Compliance and monitoring approaches are streamlined and coordinated.
Regulators are open and transparent in their dealings with regulated entities.
Regulators actively contribute to the continuous improvement of regulatory frameworks.
There is criticism of regulators too. The Bar Council is critical of the Legal Services Board, for example, for “overreaching its proper role”, while Water UK points out that the remits of the four regulators of the water industry “overlap and, at times, conflict”. From a different perspective, Surfers Against Sewage is critical of Ofwat and the Environment Agency for poor communication and “failing to hold industry to account” for pollution.
For the UK Government, Lord Johnson of Lainston at the Department for Business and Trade references the current consultation on ‘smarter regulation’ where trustees of the Institute have also submitted a response, which we will circulate once published. He notes the government’s “clear alignment … with the questions that you are asking in your own inquiry” and he agrees that “it is essential that regulators operate as well as they can to deliver for the UK economy”.
The Institute will keep you informed of all developments as they happen.