A group of Tory MPs and peers, the Regulatory Reform Group, is seeking to install a direct oversight line over UK regulators in the cabinet office, claiming this would lead to “better outcomes for the British people and the British economy”. 

 

Alleging a “lack of democratic oversight” of regulators since Brexit, the group – which says its formation has been welcomed by the prime minister – is apparently looking to bring regulation directly into the cabinet office by installing an ‘Office for Regulation’ there, suggesting that it is mainly regulation, rather than recent politics or global factors, that is responsible for the UK’s sluggish growth.  

 

In a new report titled, ‘The Purpose of Regulation’ the group argues that there are issues in how regulators interact with industry, saying that “the regulator-to-regulated relationship is not always collaborative and can be defined by mistrust, deterring innovation and leading to an excessively risk-averse culture”. 

 

The Regulatory Reform Group is chaired by Bim Afolami. The MP for Hitchin and Harpenden also sat on the now defunct Regulatory Reform Committee, the remit of which has been transferred to the Business, Energy and Industrial Strategy Committee. 

 

Other members of the RRG are former chair of the Competition and Markets Authority and the Treasury Select Committee Lord Andrew Tyrie, former economic secretary to the Treasury Richard Fuller, former development minister and MEP Vicky Ford, former Wales secretary Alun Cairns, former Conservative vice chair Stephen Hammond, former special adviser to Boris Johnson in the Brexit unit James Wild, former justice secretary Sir Robert Buckland, and Mark Garnier, a former junior trade minister.  

 

Tracy Blackwell, the chief executive of buyout specialists Pension Insurance Corporation, chairs the RRG’s Business Advisory Council. 

 

Afolami said that “unaccountable regulators are directly hindering the UK’s growth prospects”, while Lord Tyrie called for “an era of increasingly anonymous and powerful quangos, often underperforming” to end. 

 

City minister Andrew Griffith has given his support to the report, saying however that the financial services and markets bill would already help “to align regulators’ objectives, improve their accountability and to focus more on outcomes”.  

Aside from pulling regulatory oversight directly into the cabinet office, the group also proposes a new ‘accountability framework’, establishing a standardised set of metrics to measure the performance of the UK’s major economic regulators, and implementing "an outcomes-based approach" to future regulation, as well as creating a definition of regulation. 

 

The report includes a recommendation to form a new cross-parliamentary committee to oversee the performance of regulators. 

 

The RRG is careful to point out that its report “is not promoting slash and burn deregulation, but rather a smarter, and more democratically accountable approach to overseeing regulators to deliver better outcomes for British people and the British economy”. The report highlights examples where this has been achieved, arguing for a similar approach to be implemented systematically across the regulatory landscape. 

 

The ideas partly echo those of former prime minister Liz Truss, who sought to give the government a direct veto over regulation. The Bank of England’s deputy governor for financial stability, Sir Jon Cunliffe, had expressed serious concerns about this. 

Truss’s proposal was withdrawn by her successor Rishi Sunak after she had to step down last October with less than two months in office, amid the market reaction to her and her chancellor’s policies.