Parliament calls for greater regulatory accountability

The Purpose of Regulation report said that a “lack of democratic oversight” of regulators is holding back productivity and economic growth and recommended the formation of a new cross-parliamentary committee to oversee regulatory performance.

The report features calls for greater accountability from regulators from various conservative MPs including Bim Alofami, who is also RRG chair, former secretary of state Sir Robert Buckland, former economic secretary to the treasury Richard Fuller, and Lord Andrew Tyrie, among others.

It identified four main systemic issues with regulators, including a “lack of strategic direction”, strained relationships between regulators themselves and with industry, “incomplete lines of accountability” concerning objectives and measurement of performance, and a need to build up greater skills and knowledge and support regulators with resourcing.

The report also recommended establishing a clear definition of a regulator to enable better scrutiny, having a dedicated Office for Regulation in the cabinet office, having an “open, two-way dialogue” on implementation and performance, having a new accountability framework with new standardised metrics, and implementing an outcomes-based approach to future regulation.

It cited several general “cross-cutting issues” affecting most types of regulators, including a lack of consumer focus, being slow to act, having a lack of focus on long-term net-zero ambitions, operational siloes, and a lack of consistent benchmarking against international best practice.

The report also cited the liability-driven investment crisis of last year, pointing out that regulators had not seen the crisis coming.

Alofami, who is MP for Hitchin and Harpenden, said: “Unaccountable regulators are directly hindering the UK’s growth prospects. Regulators have the potential to be key drivers of the government’s long-term ambitions for the UK, not to mention enablers of economic growth, but without adequate oversight from parliament, this potential has been lost. This report is not proposing that regulatory reform holds all the answers to unlocking growth in the UK, but it is certainly a start.”

RRG business advisory council chair and Pension Insurance Corporation chair Tracy Blackwell said: “We need to be smarter about how our regulatory regime can best benefit the economy, communities, households, and individuals across the country. As businesses we really do need to ensure stability and growth across the entire economic cycle.

“The business advisory council aims to complement the work of the parliamentarians in the RRG by identifying common regulatory issues across sectors, providing specific examples of breakdown, but also helping with an overall, systematic appraisal of our regulatory system – where it works well and what can be improved.”

MP for South Swindon Robert Buckland said: “It is important to note that this project is by no means an ideological ‘race to the bottom’ in terms of regulation. All we are seeking is a more transparent and proportionate approach to regulation where, crucially, regulators are held accountable against the objectives they are mandated to deliver.”

MP for North East Bedfordshire Richard Fuller said: “The UK regulatory system is being undermined by a democratic deficit that we have failed to address since Brexit. After leaving the EU, we’ve handed our regulators huge powers over really significant parts of our economy, with little to no democratic oversight of how they are exercising these powers, or way of measuring their performance.”

Tyrie said: “All of us are now much more vulnerable to rip-offs across regulated industries. Part of the problem – and part of the solution – lies with parliament. Too many decisions – taken by powerful, anonymous quangos, and affecting millions of people – go scarcely scrutinised and inadequately explained.

“Parliament must now do more, much more, on behalf of the public, to challenge regulators to perform better. To accomplish this, parliament now needs – at a minimum – a committee dedicated to holding the major regulators to account, supported by enough expertise to make a thorough and authoritative job of it.

“Parliament needs to expose the extent to which some regulators are failing to fulfil their statutory obligations and duties. And parliament should require early remedies. An era of increasingly anonymous and powerful quangos, often underperforming, has to end.”