A House of Lords Committee has warned that a combination of
unclear guidance from 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. Any such failure could drive
new investment away from the UK.
In ‘Time is money: How
regulators can support growth', a report published today
(Tuesday 12 May), 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 says regulators need to
provide speed and certainty in their decision making to help
businesses make investments.
The Committee also urges on the 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 calls 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, 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.”
