Here we go again!
The prime minister, writing in The Times, has promised to target the "thickets of red tape that ... were allowed to spread through the British economy like Japanese knotweed. We will kick down the barriers to building, clear out the regulatory weeds and allow a new era of British growth to bloom."
I have lost count of the number of deregulation initiatives that have followed Harold Wilson's 1948 "bonfire of controls". None of them have reduced the total burden, of course, but let's not be too cynical. The constant emphasis on the burden of regulation, especially on business, will certainly have deterred greater excess. And some big targets certainly remain – most obviously planning regulation. I would also like to see some serious deregulation across the wider public sector. Frontline police officers, medics and many others – and their managers – spend far too much time ticking boxes.
But I am less sure that most regulators will be able to respond sensibly to the government's recent request that they should all come up with ways in which they can encourage growth, including by "responsible risk taking".
One obvious problem is that most of them already have a secondary growth objective – often amongst many others – and they are all well aware of the need to minimise the burden on business. They explicitly or implicitly carry out numerous balancing acts every day including when deciding what risks to take and how "hard" to regulate. They understand that smaller firms find it more difficult to comply with complex legislation, they will inspect compliant firms more often, and so on. It's quite hard to see how an increased focus on growth will make a significant difference to their day-to-day decision-making.
Minor tweaks can always be offered, of course – a redrafted form here, a longer timescale there. But that is presumably not what ministers are looking for. They appear to want to see significant, measurable policy changes but these are inevitably more problematic.
It will often be far from clear what, if anything, a regulator can do. How, for instance, can Ofsted encourage growth when it inspects schools, or the CQC when it inspects care homes? Would lower standards help, or tougher ones? Maybe Ofwat and the Environment Agency should encourage the water companies to save money by dumping more sewage in rivers?
The financial regulators can probably respond more easily. The FCA's rule book apparently runs to 10,000 pages. It won't be too difficult for them to lighten reporting requirements and allow riskier lending. But... the last time the UK dabbled with light touch financial regulation was just before the 2008 financial crash.
"It will often be far from clear what a regulator can do. How can Ofsted encourage growth when it inspects schools, or the CQC when it inspects care homes?
Others will surely face real problems. Let's take the Civil Aviation Authority, for example. What can the CAA do to encourage growth? I assume that no-one wants them to relax aircraft and airport safety standards. So what about their responsibility for setting landing charges? Should they increase them, other things being equal? The airports would be happy; the airlines and their passengers not so much. There would be less tourism; good for the environment but maybe not so good for growth.
Or should they reduce landing charges? This would encourage tourism but make it even harder for Heathrow to fund its proposed third runway. No doubt the clever folk at the CAA have found an answer that pleases the chancellor, but I wonder if it will both make a significant difference and withstand critical scrutiny.
The Competition and Markets Authority is already in trouble with ministers. Microsoft and other large US companies complain that the CMA takes an over-strong pro-competition stance. The CMA disagrees and argues, correctly, that growth comes from innovation and greater efficiency, both of which are strongly encouraged by effective competition. Companies that dominate their industry often stop innovating and focus on maintaining their market power by squeezing or buying up their competitors. That's why Microsoft and others hate competition authorities such as the CMA. The chancellor should ignore them.
The CMA's chair put this case to the government, who responded by sacking him and drafting in someone who previously worked for Amazon. So much for independent regulation! Donald Trump and Elon Musk will have been pleased. Maybe that's what the pro-growth regulatory agenda is all about?
Martin Stanley is a former senior civil servant and public sector chief executive. He is editor of www.civilservant.org.uk and www.regulation.org.uk – which provide authoritative information on the civil service and regulators respectively. He also writes a regular Substack on the UK civil service, which you can subscribe to here.