Statement made by , Secretary of State for
Business, Energy and Industrial Strategy
The UK has left the European Union. We have regained sovereign
control over our laws, borders, and money. For the first time in
half a century, we have the freedom to conceive and implement
rules that put the UK first. This means that now is the time to
think boldly about how we regulate in order to modernize our
approach, unlock cutting-edge technologies, ease burdens and cut
red tape, and boost competition.
In July 2021 I jointly launched the consultation on “Reforming
the framework for better regulation”, to capitalise on the
regulatory freedoms provided by leaving the European Union. In
the consultation I set out that the Government is committed to a
regulatory system that is smart, proportionate and considers the
needs of business. The system government uses to manage the flow
of regulation and understand its impacts is key to delivering
this commitment and plays an important role in helping to drive
behaviour and approaches to policy making across government.
An overwhelming majority of responses to the consultation
welcomed some degree of reform. A full summary of responses to
the consultation will be published today, alongside the
Government’s policy document, The Benefits of Brexit.
Our proposed reforms to the framework for better regulation are
underpinned by four core policy changes, that aim to improve and
control the flow of regulation across government, and assess its
value:
- Adopting a greater emphasis on proportionality, to ensure
that we regulate in a way that focuses on allowing businesses to
grow, while giving greater flexibility to try innovative new
approaches.
- Ensuring that we are making the best use of alternatives to
regulation by introducing an earlier scrutiny point at which
departments will be asked to justify their decision to regulate.
- Improving how we evaluate regulation, including
post-implementation reviews.
- Improving how we measure the overall impact of regulation,
including consideration of a more holistic approach and the
removal of the Business Impact Target (BIT) in its current form.
While these reforms represent a streamlining of process and a
change of emphasis, they do not undermine or reduce the
requirements for departments to produce options appraisals and
quantified impacts in accordance with the Green Book.
The reforms proposed to the framework for better regulation will
not take place at once. There will be a transitional year, with
one final BIT report, while we bring forward legislation to make
changes to the Small Business, Enterprise and Employment Act
2015. BEIS will use that time to agree with departments the
details of metrics, targets and exemptions.
Alongside these reforms, today I will publish a policy paper on
the future of economic regulation of water, energy, and telecoms
within the UK. This follows a commitment in the National
Infrastructure Strategy for government to produce an overarching
policy paper in this area.
The policy paper will set out government’s vision to incentivise
increased investment needed to create world class utilities
infrastructure that helps protect consumers, promote economic
growth and sector resilience, whilst meeting our ambitious
environmental targets. The paper covers the following areas:
- How the government intends to ensure that the regulators’
duties will allow them to meet these systemic challenges,
conducting a review of duties in 2022;
- how the government will provide strategic clarity on our
long-term aims for these sectors, publishing a letter of
strategic guidance to the CEOs of Ofwat, Ofgem, and Ofcom;
- how competition for strategic investment opportunities can be
enhanced for the long-term benefit of consumers and investors;
and
- how transparency and consistency in key processes can be
improved; in particular seeking appropriate alignment on
economical calculations and the regulatory appeals system.
This policy paper is the first step to updating our model of
economic regulation. In 2022, we will be launching a consultation
setting out more detail on a package of measures to ensure the UK
model of economic regulation fits the needs of the modern age.
I will place a copy of the future of economic regulation of
water, energy and telecoms within the UK paper in the Libraries
of the House.
In putting all these reforms into practice, the Government and
our independent regulators must always remember that the way we
make and enforce regulation makes a tangible difference to
people. Our job is to help people and businesses to achieve
better outcomes for themselves. That was what taking back control
for the UK was about.
