Brexit: law and enforcement

By Richard North - June 17, 2021

If there were three people in this world that I would not choose to carry out a study on regulatory reform, they would be Iain Duncan Smith, Theresa Villiers and George Freeman. Unsurprisingly, therefore, these are precisely the three that Johnson has chosen for the task.

Calling themselves the Taskforce on Innovation, Growth and Regulatory Reform, they have produced a 130-page report entitled “A Bold New Regulatory Framework for the UK”. And according to the Financial Times, it will now be examined by a deregulation committee, which includes Rishi Sunak, chancellor of the exchequer, and Kwasi Kwarteng, business secretary.

Iain Duncan Smith – according to the FT – considers that Brexit is a “one-off” chance for UK “to escape EU red tape”, although he and his co-workers don’t actually say that in their report. In fact, they say that their project is not a simplistic “bonfire of red tape”. Regulation, they say, performs many crucial tasks and the nature of our regulatory systems also affect our trade relationships with other countries.

Good regulation, well thought through, they add, can give confidence to global investors, protect consumers, workers and the environment, and secure a range of crucial policy outcomes.

Then they tell us that, “Ensuring that our approach to regulation minimises competitive distortions is an important means to deliver long-term growth an prosperity, as well as putting us in a strong position to conclude free trade agreements with countries around the world”.

And they also assert that we “need reform to reflect the pace of technological change which is creating new sectors, but where a lack of regulatory certainty is holding back investment”.

All of this sounds vaguely promising, until one sees that they have “sought views from a wide range of businesses, academics and think tanks through dozens of roundtables and meetings with over 125 experts on how the UK can improve how it regulates, now and in the future”.

But looking at their list of consultees – which includes the likes of the IEA – what is remarkable is the lack of enforcement agencies or their representatives. And it is that probably represents the greatest weakness of this study.

The importance of this should be evident. Regulation is a partnership between legislation and enforcement and the best effects come when the two are in balance: poor legislation often begets poor enforcement and even the best law can fail through lack of effective enforcement.

Here, in this report, the relationship is recognised, with the authors (with somewhat hazy terminology) remarking that, “the way in which regulation is implemented can be just as impactful as the regulations themselves”. Implementation is not the same as enforcement, but we can work out what they’re trying to get at.

Where the UK is rightly and proudly committed to maintaining the highest regulatory standards, including in relation to food and the environment, they say, “that does not mean we have to continue with the same, often bureaucratic and self-defeating, methods of implementation”.

For an example, they cite “UK farmers” who face compliance with potentially hundreds of regulations, depending on their business, enforced by several different agencies and public bodies.

And from that apparently single example, they call for “a more integrated framework of implementation in which farmers don’t have endless site visits and forms to fill in, but one framework of agri-environmental regulation prioritising the desired outcome more than the process of compliance”.

Actually, we’ve been there before. I remember discussing this with civil servants in 1992 in the wake of John Major’s deregulation initiative, when the “one-stop shop” was in the vogue, exactly the idea of “a more integrated framework of implementation” that is being suggested nearly 30 years later.

But then, it was rightly concluded that good enforcement came by using specialists who were on top of their game. The “tick-box” approach which is so derided by the current trio, comes from officials who are working to rote and don’t have the knowledge to identify how to achieve desired outcomes.

Personally, I was often faced with this problem in the food safety field. The desired outcome was a negative property – the absence of food poisoning. But lacking the skill and experience to identify the factors which gave rise to the problem, many officers obsessed about issues such as cleanliness and repair.

And yet, it is common to find in food poisoning outbreak reports, the premises marked down as “clean and in good repair”. I actually wrote a paper once, on cleaning as a cause of food poisoning, and it is certainly the case that the amateurs tend to focus on visual appearances rather than practices.

There again, while a food safety specialist will be just the person to advise a farmer on the operation of a food business, recognition of the very special hazards involved in farming operations requires its own specialism, while pollution controls are another specialist field. The idea of an integrated framework is a fantasy.

But here we go with these born-again deregulators, stomping over the same turf without the first real idea of how to achieve their own desired outcome. In a report that mentions “regulation” in its various forms 269 times, the variations on the implementation theme run to 45 mentions, many of which don’t refer to regulation, while variations on enforcement appear a mere three times.

This, in my experience, is typical of MPs and their approach to what they call “regulation”, inviably equating it with legislation and only giving a passing thought to enforcement. Styled as “lawmakers” by the likes of Reuters, in the main MPs simply don’t have the enforcement experience and thus fail to recognise its importance.

However, what is hugely entertaining about this report, in a perverse sort of way, is its recommendation that the “Proportionality Principle” should be at the heart of all UK regulation. This, the authors say, “is absolutely central to the new framework we are proposing”.

By making regulation proportionate to both the scale of the risk being mitigated, and the capacity of the organisation being regulated, they believe this new UK framework will boost both UK economic competitiveness and UK regulatory leadership.

The irony here is that “proportionality” in relation to regulation is not recognised in English law (or Scottish, for that matter). It is entirely an EU principle, embodied in Article 5 of the Treaty on European Union, which requires that “the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties”.

The brave new world of Brexit is looking to the EU for its inspiration on reducing the effects of EU law. In the main, though – since legislation can only address generalities, because the specific risks in relation to individual operations are unknown – the crucial application of proportionality comes at the enforcement stage, where officials have to judge which parts of their legislative toolboxes they should use to achieve desired outcomes.

Thus, with 100 recommendations listed to create their “bold new regulatory framework”, the authors have not so much created a new framework, as suggested the replacement of a few pieces in a vast jigsaw of infinite complexity, the nature of which they haven’t even begun to understand.

Interestingly, elsewhere we see a report on “concerns over availability and capacity of UK abattoirs”, where the National Sheep Association is worried about “the steady decline in the network of small- to medium-sized, multi-species abattoirs in the UK”.

A report by the All-Party Parliamentary Group for Animal Welfare (APGAW) on small abattoirs highlighted the decline of licensed abattoirs in the UK since the 1930s with the number of licensed abattoirs in the UK decreasing over the years from 30,000 registered in the 1930s to around 250 today.

The proximate cause of the most recent decline was EU regulation, from which the industry has never recovered, with Brexit presenting an opportunity to address an historic problem which was made worse by UK officials insisting on gold-plating. Now, for some farmers in the southeast of England, the closest facility has been just across the channel in France.

It is no surprise, though, that this report doesn’t mention the abattoir sector, even though lifting the unnecessary regulatory burden would be one of the most effective ways of aiding livestock farmers. But then, that’s what you get when you let amateurs into the field. All they do is waste everybody’s time.