Since the Brexit referendum campaign started in 2015, Britain’s political class has obsessed itself with cultural questions. The Brexit divide, closely followed by a copycat American fixation on trans issues, has consistently combined with the ever-present focus on “diversity”.
The pundits kept saying that culture was what now mattered to voters, rather than the hard realities of the economy or the delivery of public services. Unsurprisingly, the attention paid to cultural questions has far outstripped the boring, technical work of growing our economy and making this country work.
We now have a serious, reform-minded Prime Minister who wants to fix problems and get things moving again. He is pulling every lever he can find in government; however, far too few of these levers are attached to anything that works.
The machinery of the British state has been long neglected, and needs a complete overhaul, with a particular focus on two key areas.
First, we need to tackle the alarming growth in poorly made and conflicting regulation which permeates every area of economic life, strangling economic activity for small businesses. Second, we must address the continued expansion of judicial review, which is slowing or stopping critical decisions and pushing up costs for everybody. Only when we have started to make progress on these aspects of government will we be able to turn our policy intentions into results on the ground.
Let’s start with regulation. In 2019, the National Audit Office (NAO) found that there were roughly 90 regulatory bodies in the UK. Taken together, these bodies regulate about 45pc of our private sector. While regulators often deliver economic and societal benefits, they also impose monitoring and compliance costs, estimated to total over £100bn annually for the private sector.
Our regulators perform an important function, and in many instances they work well. However, as chair and founder of the Regulatory Reform Group, I have spent the past few months speaking to dozens of regulators and businesses, ministers and civil servants.
The overwhelming sense is that Britain has seen its regulatory state grow without broad strategic vision. At the same time, serious oversight from Parliament and Government has been absent.
This has real, practical effects. A recent example was the decision by Natural England to change advice to planning authorities regarding nutrient neutrality, which independent estimates believe has delayed the construction of over 100,000 homes.
Another example is the Competition and Markets Authority. In the wake of the CMA’s recent decision to block the Microsoft/Activision merger, a merger approved by the equivalent body in Brussels, the organisation’s chief executive seemed to imply to me in a committee hearing that the regulator does not directly consider the impact of its decisions on the UK’s international reputation as a place to invest or do business.
When asked about the CMA, the Chancellor said: “I would not want to undermine [the CMA’s independence] at all, but I do think it’s important all our regulators understand their wider responsibilities for economic growth”. I agree.
So how to tackle our regulatory quagmire? Quite simply, much more accountability and transparency to Parliament and to central government. Regulators should be independent, but independence is not immunity. Parliament should have a well-resourced, specialist committee of expert MPs and peers to look at regulators and their actions. This should supplement the work of select committees, which primarily appraise government departments.
In addition, the Cabinet Office must establish oversight over what regulators are doing as a core purpose of the department – and force other departments to manage their sponsored regulatory bodies much more effectively, and on a much tighter leash.
Secondly, the extraordinary explosion of judicial review. Professor Richard Ekins of Oxford University, a foremost expert in the area, notes that “judicial review has been much extended across the last few decades”. Why am I talking about this? It is one of the most significant factors that government must take into account when it wishes to act – the fear that it will be overruled by judges.
This is felt most acutely in major infrastructure projects. The Nationally Significant Infrastructure Project planning regime was established through the Planning Act 2008 to provide more certainty on the construction of nationally significant projects.
Initially the system worked well, but the National Infrastructure Commission has noted that, since 2012, consenting times have increased by 65pc, and the rate of judicial review has spiked in recent years to 58pc of cases from a long-term average of 10pc. That means more cost for government, and more burden on the taxpayer.
The planning system has become slower and more uncertain just as the UK needs the ability to deliver more projects, faster and on a bigger scale. For example, National Grid has calculated that achieving the government’s 50GW offshore wind ambition by 2030 will require at least 17 new energy transmission consents in the next four years.
That would be a 400pc increase on the historic rate. Government should carefully legislate to limit judicial review on decisions regarding infrastructure of national significance. Our economy can’t wait for judges to second-guess every ministerial decision.
Regulation and judicial review are unlikely to excite my parliamentary colleagues. Politicians tend to prefer the rhetorical to the practical, and new issues to the old ones. However, unless we start to tackle the nuts and bolts of how government actually impacts lives on the ground, we will not deliver on the positive agenda that we have for this country – and the country will rightly punish us for it.
Bim Afolami is the Conservative MP for Hitchin and Harpenden
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