Ignore the ideologues, we should take our time to get rid of EU laws and do it right
Kemi Badenoch did right in facing down the critics and moving the goalposts to scrap EU legislation. We need to have enough time to ensure we do it the right way, writes Bim Afolami
A great deal of attention has been paid to the looming arbitrary December 31 deadline previously imposed by the retained EU law bill; the repeal of around 5,000 pieces of EU-derived legislation, acquired over 40 years within the European Union, that form a large part of our regulatory environment.
Now, I am strongly in favour of getting rid of unnecessary rules where we can, particularly when those rules cause harm to economic growth or make us globally uncompetitive. Yet the decision of the government to remove the deadline, and move to a more thoughtful process without arbitrary cliff edges is sensible. We will still manage to repeal 2,000 of the overall 5,000 by the end of this year, and the remainder will be removed or reformed by 2026 at the latest.
Some have argued that the Brexit mandate necessitates the repeal of every single piece of EU law by the December deadline, regardless of benefits for consumers or businesses. They are misguided. Kemi Badenoch, the business secretary, should be commended for facing down the critics and giving us the time to effectively and strategically reform our regulatory system and rulebook. We can now design a regime that puts better outcomes for our citizens at its heart and enables our lawmakers to set out and deliver its strategic priorities.
In my capacity as Chair of the Regulatory Reform Group, I and my colleagues have spent many weeks with business and regulators looking at our regulatory system. There is a strong consensus that, in our current system, many regulators lack a clear strategic focus. Across all sectors, the UK’s regulatory landscape is deeply fragmented and characterised by cumbersome, siloed regulators which often lack direction from the government or are bogged down by overlapping priorities or regulatory creep.
Take the Competition and Markets Authority (CMA). Their chief executive officer seemed to imply last week that her organisation does not directly consider the impact of their decisions on the UK’s international reputation as a place to invest or do business. The government needs to be much clearer about how we set the broad strategic direction for our economic regulators in particular – and in my view we should set that direction towards economic growth and competitiveness.
The regulators themselves must also improve. Their objectives often show a bias towards more and more process, creating a tick-box culture of demonstrating regulatory compliance, with little regard for the broader outcome.
For example, stringent marking regulations, derived from the EU’s equivalent, compel companies to show market compliance through physical labels, pushing up costs for the consumer. E-labelling could reduce the cost of indicating compliance by an estimated 15 per cent in some sectors, and there is no reason why the UK cannot follow the US, Australia, and Japan in making this change. Another recent example was the decision by Natural England to change advice to planning authorities regarding nutrient neutrality, which independent estimates believe delayed the construction of over 100,000 homes.
The missing fundamental component throughout our regulatory system is accountability. Businesses across the board have complained of a lack of scrutiny at all stages of the regulatory process. It is often impossible to know if regulators are delivering their objectives, how these are prioritised, or if these are the right objectives in the first place. When regulators make mistakes, there is little opportunity for these to be challenged, unless you are big enough to take them to court.
We must now take a path not of deregulation but re-regulation, through a system guided by transparency and accountability, and where improving outcomes is not an afterthought. Our regulators, many of whom are getting more powers, need to be held much more accountable and their performance measured against clearly articulated objectives.
I come to this not as an academic but as a politician desperate to improve the outcomes for British people. These legacy EU laws all directly impact people across our country. The process of stripping them back gives us a chance to have this conversation in real, tangible terms, and implement lasting outcomes that move away from an ideological debate.