The former editor of The Observer Will Hutton once said that the regulator was “the British state in miniature” (The State We’re In, 1996). His words have ironic resonance in the title of the new House of Lords Select Committee report on the constitution, ‘The Regulatory State: Ensuring its Accountability’, which was published in May.
The idea behind the report is simple. Regulation has grown exponentially since the privatisation of nationalised industry towards the end of the past century. But regulators are not necessarily popular. Their very existence raises questions of accountability. They are there to fulfil, for the most part, Government policies.
Yet, unlike ministers, there is no clear mechanism of parliamentary accountability.
So the select committee, mindful of “the danger of regulatory creep”, sets out a panoply of recommendations for securing supposedly better regulation. At the centre of its thought process is the premise that there is a need for more accountability, which in turn requires more explanation, more exposure to scrutiny and the prospect of independent review.
It is no surprise, then, that at the end of its report, the committee proposes a new Regulatory Appeals Tribunal that will, in effect, regulate the regulators. As if this were not enough, the report recommends US-style mission statements, more codes of practice and an expanded National Audit Office to monitor regulatory impact assessments that, with the recent recommendation of the Better Regulation Task Force, will be produced by regulators on all new major policies and initiatives.
Depending on how you view things, it is a civil servant’s paradise or bureaucracy run riot. The real issue is whether the mantra of more accountability is really an axiom or overkill.
No one doubts that the processes of individual regulators could be improved. For example, the report picks up on the fact that some regulatory structures have become over-complex and “disengaged from public understanding”. This seems to be particularly true of rail regulation. Some internal relationships between regulators also need to be improved. The committee referred to, in that respect, “the poor relationship that exists between Postcomm [the Postal Services Commission] and Postwatch [the Consumer Council for Postal Services]”.
Accountability is the buzzword of the new millennium. What it fails to grapple with is that all UK attempts at regulation have been bedevilled not by lack of accountability, but by schemes of regulation being bolted on in a piecemeal fashion, usually in response to policy imperatives or political crises.
The danger of grafting on yet more legal accountability, in the form of another court or tribunal to regulate the regulators, is that it is not the right forum. Pursuing claims is both expensive and time-consuming, and most importantly judges are not properly trained to delve into the merits of regulatory decisions.
Administrative accountability, in the form of audits or inspections, will not solve the problems either. These raise the same question: who is to regulate the auditors and inspectors?
But such processes tend to measure quantity rather than quality. They do not solve poor relationships. They cannot, almost by definition, solve the problems that the regulatory laws have created. Nor will a new joint parliamentary committee – another of the committee’s proposals – really help. In reality, a committee split along party lines cannot wield the whip of accountability in any practical or effective sense.
In her 2002 Reith lectures, Professor Onora O’Neill observed that we are fostering a “culture of suspicion” and that the increased stress on accountability is a function of a national decline in trust towards those who hold public office.
The answer, I suggest, lies in the mixture of a more intelligent approach to regulatory legislation to make the different schemes cohere, as well as more trust and less imposed accountability. Otherwise, the cost of regulation is likely to soar and the current problems will simply multiply.