What links the Grenfell Tower disaster, our sewage-filled rivers, and the epidemic of hardworking people around Britain being paid under the minimum wage? The answer, rather anticlimactically, is regulation.
Rules and regulations are not generally popular with anyone. It would be frankly a rather weird fixation to be a regulation enthusiast. And yet we are now seeing the reality of a world where regulation has been neglected to the point of impending institutional collapse. That sense you might share that things in Britain have gotten a bit shabbier, business acts a bit meaner, nothing works, and life is just a shade crappier than it was, well, that’s real, and bad regulation is a major cause.
Tory deregulation: arbitrary and irresponsible
This is made clear via a new paper from Progressive Britain which, full disclosure, I had a hand in publishing, working with the author Matt Bevington. Matt has gone back through a decade of successive Conservative government’s thinking on regulation to understand how we got here.
Some of it would be hilarious if it weren’t so serious. The new Cameron government in the 2010s brought in a one-in-one-out rule for regulation, i.e., each new regulation had to have a corresponding deleted regulation. Not exactly logical, but in theory it maintains the status quo. By 2013 this was escalated to a one-in-two-out rule, before ramping up to one-in-three-out by 2015. Eventually, the ever-sensible Theresa May took us back to one-in-two-out in 2017.
Sadly though, the story continues right up to the present day. The paper finds the government has no clue if its own regulation is good or bad and seems uninterested in finding out. One in four regulatory impact assessments are rated “not fit for purpose” by their own watchdog. In one instance, a Treasury impact assessment was found to miscalculate the potential impact of regulatory changes by £1bn a year.
So, when yesterday the former head of Ofwat, the utilities regulator, Cathryn Ross told a parliamentary select committee (as reported in the FT) “Ofwat’s leadership had not always made perfect decisions but insisted it had fulfilled its statutory duties,” she is probably right.
But these duties have been put together by a government and a system that we should have virtually no confidence in.
Business interests prized above all else
At its most serious this is a life and death matter. The Grenfell Tower tragedy in June 2017 was a catalogue of regulatory failings – some associated with the building itself, others with the cladding, and yet more with the enforcement and inspection system – that cost the lives of 72 people. A report on the tragedy by the Fire Brigades Union blamed “deregulation”, claiming that business interests were placed above people living in council and social housing.
And whether you know it or not, in a smaller way, you are likely to have been directly affected. The collapse of energy provider Bulb – caused by a deregulated ‘competitive’ energy market struggling to handle the impact of the war in Ukraine – is estimated to have cost every UK taxpayer £200.
Where there is regulation, enforcement has collapsed, as government has cut the funding of the bodies who carry it out to the bone. Health and Safety Executive prosecutions fell by more than 70% between 2009/10 and 2021/22. Fire safety audits by local fire and rescue services have fallen by more than 40% since 2010. Almost a quarter of workers eligible for it are currently paid under the minimum wage.
Britain is a country where fairness and rules are highly prized by everyone – except the government – and that is why things feel so grim these days.
Good regulation ultimately benefits all
So what is to be done? The position is far from irretrievable, even if it is bleak. An incoming Labour government could and should restore the funding to the regulatory bodies who are supposed to protect us. It can beef up their powers to protect consumers. It can start seriously scrutinising the impact of its proposed regulation and taking seriously the impact assessments carried out by civil servants.
But more than this, it can start to direct regulation towards the national interest. Their five missions provide a template for the fairer, better country we all want to see. Labour’s regulatory agenda can be directed at growth, health, opportunity, the environment, and a safer society.
We can be optimistic, not just about a country that feels safe and fair again, but one where people and businesses are all pulling together to deliver on these missions for everyone’s benefit. And it all starts with regulation, regulation, regulation.