Supplementary memorandum submitted by
the Trading Standards Institute
REGULATORY REFORM COMMITTEE INQUIRY: THEMES
AND TRENDS IN REGULATORY REFORM
QUESTION 1
The future role of principles-based regulation?
We are pleased that there is a clear emphasis
from Europe, where much of new legislation is coming from, towards
consumer protection and we commend the work on the revision to
the Timeshare Directive and the implementation of the Unfair Commercial
Practices Directive.
A move towards principle-based legislation is
welcome to help prevent both some of the problems of the past
and also the creative nature of criminals to find and exploit
loopholes in detailed legislation. We need clear, simple legislation
that is easy for business to understand and comply with, coupled
with the flexibility of defined principles that protect the collective
interest of consumers and legitimate businesses.
There is an important cautionary aside for principles-based
regulation to have the desired effect, that the conditions have
to be right. "Robust" regulation may be needed in certain
sectors such as the financial service sector where Lord Turner
articulated the need for "intense supervision". Law
and regulation should capture the public mood and in that sense
TSI supports principles-based regulation in the sense that in
theory it aims to address the mischiefs in an appropriate and
explanatory, flexible way.
It is just as important to remember that Business
needs certainty for survival and in order to thrive in the market
place but not if consumer protection is compromised.
This, and the basis of law in the UK (articulated
in the Davidson report) calls us to express these concerns notwithstanding
our broader policy support for principles-based regulation.
Principles-based legislation needs Government
guidance, as it is imperative in any legislation that to secure
certainty it is important for Government to issue timely and appropriate
guidance. That in itself causes the concern that guidance becomes
law and leads to the potential for challenge to the attitudes
of the judiciary. At a time when Government is keen to minimise
burdens on the judicial system, there is perhaps more likelihood
of greater challenge to principles-based legislation.
QUESTION 2
What is your opinion of the establishment of a
FARO Fast Assessment of Regulatory Options Panel?
We are not convinced of the necessity or additionality
that will be given by such a panel. We would agree with the Government
that there is already a wide-range of existing policy-making mechanisms
to provide the requisite level of objective scrutiny. We have
already seen the materialisation of many advisory groups and committees:
the Better Regulation Task Force, the Better Regulation Commission,
the Regulatory Risk Advisory Council; and we would ask is this
really the right time for another addition to an already busy
canvas?
QUESTION 3
What is your view of the Government's decision
not to proceed with regulatory budgets?
An appropriate decision due to the complexity
of the proposal although attractive in principle.
We fear that it would have built bureaucracy
rather than reduce it, remove focus away from the net benefit
that legislation can bring, and constrain the regulatory machine
from putting in place regulation to protect the economy, good
business and consumers.
We have not seen an evidence base that there
is a collection of unnecessary legislation constantly emanating
from all government departments and agencies. Equally it would
have been useful to have carried out a desktop exercise to demonstrate
the likely effects that regulatory budgets would have upon the
legislation enacted over the last few years.
Broad-brush policy is unnecessary and where
evidence exists of over—burdensome measures hindering new
business opportunities, they should be dealt with specifically.
We estimate that over 80% of legislation emanates
from Brussels and that has to be implemented; we have never been
clear as to how Regulatory Budgets would sit within this process.
There is the concern that the nation would be deprived of those
occasions when national legislation is required, where regulatory
budgets would be looked to instead.
We see that there are great advantages in joined-up
government and collaboration but do not see how regulatory budgets
would have assisted this process.
3.1 What is your view of the proposed alternatives
to regulatory budgets?
One of the proposed alternatives to regulatory
budgets is a "Forward Regulatory Programme"—taking
the pressures on business into account with regard to the EU better
regulation agenda and new European regulation, enabling business
to plan ahead. TSI does not oppose the idea but would expect regulators
and consumers to be taken into account also. It is equally important
that consumers and regulators anticipate being embraced in such
a forward thinking regulatory programme. It is fundamental to
the issue that any legislation has to be implemented by Trading
Standards and others in the regulatory field.
The programme to include a new external Regulatory
Policy Committee—which will advise Government on whether
it is accurately assessing the costs and benefits of regulation,
TSI would not resist in principle. However, we would like to see
what the proposed costs and benefits of the committee would be
and what it will replace. How productive will it be in accurately
assessing costs and benefits of regulation?
The fundamental issue for TSI is that Government
ought to have as much regard to the impact of legislation on consumers
as it does on business. Whilst we support better regulation initiatives,
we want to see every part of Government under an obligation to
scrutinise proposed legislation and regulation to identify consumer
public benefit.
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