The coalition government made great play of the need to cut red tape and costs from new regulation, both before and after the general election. It believes legislation should be periodically reviewed under a sunset clause to make sure it’s worth keeping.
The basic mantra is that any new legislation with cost and time implications will have to be balanced by reductions somewhere else – deputy prime minister Nick Clegg’s so-called “One in, one out” principle. New regulations are to be screened by a ‘star chamber’, the Reducing Regulation Committee, headed up by business secretary Vince Cable.
In principle, that sounds like common sense. Business often complains that innovation is stifled by over-complicated, often overlapping and sometimes counterproductive regulations.
But will it really work for environmental measures, such as energy and climate change regulations and taxes?
Unlike most taxes, green taxes are meant to increase short term pain to change behaviour in the long term. If they are successful, revenues will eventually fall to zero. So making a measure such as the proposed carbon tax revenue neutral in the interim would make it pointless – unless revenues were to be recycled in a different way, for example to reward low-carbon behaviour.
It’s also hard to see how such a simplistic approach could work when one bill usually deals with several different areas of policy. How would you ensure equivalence, what kind of metrics would you use when a simple count of bills fails to reflect their impact? Up to now, major bills have been accompanied by regulatory impact statements, measuring both costs and benefits, though these tend to be incomplete.
And there is another issue. When the Better Regulation Task Force reported back to then prime minister Tony Blair in 2005 recommending a ‘One in, one out’ regulatory model – yes, there really is nothing new under the sun – they also recommended “political commitment to a target [to cut burdens] and an organisational structure that provides incentives to achieve that target”. They implied more expertise and resources were needed.
A small team having oversight over all regulation effectively means another layer of decision-making, by generalists. They would be second-guessing what is called for by specialist departmental decision-makers after they’ve reached an often finely balanced consensus.
If that cuts out duplication, unnecessarily restrictive or costly regulations, and rationalises the rest, that would be a good outcome – though surely that’s what consultation, select committee scrutiny and Parliamentary debate is supposed to be all about.
But a hastily thought-out veto could also frustrate months of consultation, damage confidence in democratic procedures, increase business uncertainty, slowing down vital regulations and other measures even more. It could even undermine our ability to meet targets such as those under the UK’s carbon budgets under the Climate Change Act 2008. To cut emissions by 80% by 2050 relative to 1990 there will need to be a wide range of urgent energy efficiency and infrastructural measures with a predictable impact on emissions to be introduced in a very short timeframe - or we will fail.
“One in, one out” could help pragmatic law-making – but only if applied without dogma, by a star chamber that’s well-resourced, with all the facts before it. The truth is that once beyond the populist rhetoric, it’s not an easy call to make, neither quick nor cheap.
And with a climate emergency on our hands, we can’t afford the distraction of a fundamental regulatory overhaul. That’s probably why it faded from the scene last time round. Maybe it will be different this time…