Lords call for urgent action on regulation for growth

(by Karma Loveday)

Investment could be driven away from the UK if the Government and regulators don’t do enough to facilitate growth and innovation.

That was a warning from the House of Lords Industry and Regulators Committee in Time is money: how regulators can support growth, published last week. The report argued that a combination of unclear guidance from the Government, legislative restrictions and the need to balance growth with their other duties might result in regulators failing to meet the Government’s call for them to facilitate innovation and growth.

The Committee urged 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.

• 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 also 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 of Kentish Town, 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.”