Matt Kilcoyne is Head Of Communications at the Adam Smith Institute.
We’re now over a year into the pandemic radically shifting the creation of legislation, from a long-winded process studded with Parliamentary scrutiny and debate to laws affecting so many now so often made on the fly.
Frankly if any Member of either House tells you that they know what each of 600 sets of regulations (plus primary legislation and 1014 Statutory Instruments (SIs) used to amend past legislation) does and how it has updated laws previously in place, including that of the 1833 St Helena Act, then they’re having you on. No one could understand or advise on what has happened in whole to the laws our Parliament makes, amends, and repeals.
Now a lot of the SIs that went on in Parliament, last year especially, were to do with converting the EU’s acquis into British law. These SIs were put in place to ensure the promise of Britain starting independence from a position of non-divergence was kept;
This past year could be seen as an exposé of what’s been happening more generally with our legal system for decades: Parliament dictated to by foreign bodies, impacted by devolved ones, and bypassed by executive order. No one could tell you what has occurred across all our laws and the tens of thousands of pages of additions. Yet ignorance of that law is no excuse, and it can cost dearly to not know.
Our Common Law system, uncatalogued laws with no search function, and the lack of understanding about case law specifics and Parliamentary reasoning all add to the cost of compliance for firms. In turn that adds up to lost innovation and productivity, lower wages, and fewer life chances. All told the cost of regulation was estimated by the National Audit Office to be over £100bn in 2017, and a large chunk is just checking you’re on the right side of the law.
But wait, wasn’t one of the reasons that we left the EU that we could look again at all the little laws and silly additions to our statute and start to rid us of these meddlesome interventions? Didn’t Boris Johnson in 2019 order a bonfire of red tape?
Well, yes and no. Johnson’s bonfire is as mal-quoted as his “f**k business” exclamation. The latter was a broadside at corporates pretending to speak for the whole market when they actually speak only and rightly in the interests of themselves and their shareholders.
Likewise, the ‘bonfire’ was actually an explicit attempt at introducing mercantilist procurement practices rather than having non-discrimination of bids by nationality – the vast majority of which have actually now been kept in place via the UK-EU Trade and Co-operation Agreement.
However there are some signs of life in the government’s plans for deregulation. Or as they’d rather call them, plans for better regulation.
Before alighting to lead preparations for COP, Alok Sharma set up a series of consultations and reforms across industries and sectors. Kwasi Kwarteng’s brush with the unions and the FT over an employment rights review put paid to any labour market shake-up, but all the rest continue.
Some of these were supposed to be of higher stakes than others — we’d all assumed the consultation on a new subsidy regime was bigger than the reform of audit, at least until a former Prime Minister’s relations to a certain financial services company started hitting the headlines.
Jacob Rees-Mogg has oversight of the vast bulk of Covid legislation because of the sunset clauses backbenchers forced the Cabinet to put in place on the emergency powers. I think it’s reasonable to trust the Leader of the House’s desire to return ancient liberties to modern Britons and so I suspect some simplification will be coming our way purely by the ticking of the clock.
The real big potential, though, is thought to be with Rishi Sunak’s Better Regulation Cabinet Committee, which has oversight across all departments and involves the likes of Kwarteng, Lord Frost, and Michael Gove all in one place.
Quite what is within scope is less certain than what isn’t. Anything ringfenced by the manifesto or which could go viral on social, such as environmental standards or labour standards, is out. But technically everything else is in, including how and what and when to diverge whole sectors from Europe, when to sandbox as the UK did successfully with fintech, and even the form and role of lawmaking at Westminster.
The Adam Smith Institute’s latest paper, Ignorantia Legis, tries to give the Chancellor some neat new ideas to ensure we get better laws, rather than just more of them.
The first thing is to stop the direction of travel towards more laws as a matter of course. A lot of this stems from process-driven regulation. This year the full cost of that way of thinking was laid bare with the precautionary principle and the vaccine in Europe. Expedited experiments where there is a clear cost-benefit case to do so would allow circumvention of onerous process-driven regulation, replacing it with clear result-driven approaches.
Higher risk, and higher personal responsibility and in ordinary times assigned liabilities, but with higher rewards. Moonshots if you will.
From moonshots to sunsets, so much of regulation is designed to stop the possibility of the very worst outcome happening. Often this is done where the potential for such an outcome is not known at first but becomes known over time. There are plenty of laws already on the statute relating to harming others, duplicating them time and again when new issues arise is unnecessary and often duplicates legislation.
To combat this, MPs should make more frequent use of sunset clauses when passing penalties and regulations, so that they can be routinely revisited and then set aside if and when the harms or moral panic they were designed to address have either been dealt with or failed to materialise.
Ministers will not win the war on wasteful legislation if they start looking for individual wins or headlines. They should instead commit to reducing lines of rules, pages of books, and issues contained within Acts. Doing so will cut the.bill the Government imposes to British businesses and each of us as citizens. That will make the UK a richer, safer, fairer and better place to work and live.