A Proliferation of Principles – UK Constitutional Law Association

Shortly earlier than the July 2024 basic election was known as, the Conservative Authorities printed a White Paper on its strategy to regulatory reform.  Supposed to make sure the UK’s regulatory panorama delivered “a world-class service”, Smarter Regulation: Delivering a Regulatory Setting for Innovation, Funding and Progress included numerous proposals to streamline regulation, together with a one-stop store and portal to entry laws, an enhanced function for the Regulatory Coverage Committee in scrutinising choices and impression assessments for laws, and a framework to measure progress by regulators caught by the Progress Obligation established underneath s. 108 of the Deregulation Act 2015 and now topic to new statutory steerage issued just a few days after the White Paper was printed.

One of many proposals within the White Paper was a set of ten new regulatory rules (which I’ll name “the Newer Ideas”) that authorities and regulators can be anticipated to undertake to advance a “service mindset”.  Completely different from the seven drivers and 7 behaviours of smarter regulation contained within the new Progress Obligation: Statutory Steering Refresh (although with some overlap), these rules seem to take a seat alongside the 5 new regulatory rules included within the Advantages of Brexit report from January 2022 (referred to on this put up as “the New Ideas”), which themselves had an opaque relationship with the 5 rules of Higher Regulation espoused by Tony Blair in 1997 (“the Earlier Ideas”, once more my label).

Earlier than a set of “even newer rules” emerges from the inevitable overview of the White Paper by the incoming Authorities, it’s well timed to mirror on the unpredictability engendered by this proliferation of regulatory rules.  If, as this put up explores, they might have authorized standing reasonably than mere political traction, their which means and interrelationship must be clarified to keep away from pointless tensions, forestall their dilution and enhance their enforceability.  If they aren’t supposed to have authorized which means, this ought to be made plain.

Context for the New and Newer Ideas

The New and Newer Ideas emerged from the Johnson / Truss / Sunak Governments’ overview of the UK’s strategy to regulatory coverage inspired by the elevated freedom ensuing from Brexit.  The Retained EU Legislation (Revocation and Reform) Act 2023, initially hailed because the ‘Brexit Freedoms Invoice’, not solely modified the standing of retained EU regulation, now ‘assimilated regulation’, but additionally included legislative mechanisms to facilitate re-regulation or de-regulation.  This was a course of which, however the elimination of the unique sunsetting of all EU-derived regulation, the Johnson / Truss / Sunak Governments remained eager to finish expeditiously.  Some purple tape was clearly outdated or irrelevant within the post-Brexit period – newspaper articles referred to guidelines on Japanese carnations and Polish canal boats – however, as talked about in a earlier put up, not all EU-derived regulation was egregious. Consideration of the optimum regime for every coverage space was, and is, wanted, and this required, and nonetheless requires, a deeper query to be addressed: what rules ought to be engaged when figuring out the strategy to what’s assimilated, restated or revoked?  In the identical vein, with the UK now absolutely liable for its personal regulatory trajectory, it was, and is, pertinent to ask what rules ought to underpin future regulatory selections, be these taken by Authorities policy-makers or regulators?

In keeping with the Advantages of Brexit report from January 2022, the Authorities’s reply to the primary query gave the impression to be: (i) a sovereign strategy, (ii) main from the entrance, (iii) proportionality, (iv) recognising what works, and (v) setting excessive requirements at dwelling and globally, rules that had been doubled down on in a coverage paper from Could 2023, Smarter Regulation to Develop the Economic system.  At one degree, these New Ideas gave the impression to be mere political soundbites designed to provide catchy headlines and to tell regulatory coverage selections that the Authorities might be questioned about in Parliament and judged on on the subsequent election.  As such, they had been unremarkable.  What’s to not like a couple of pledge to “use our new freedoms to comply with a particular strategy primarily based on UK regulation, protected by unbiased regulators and designed to strengthen UK markets” or a concentrate on “the longer term, shaping and supporting the event of latest applied sciences and creating new markets”?  A Authorities dedication to “totally analyse [its] interventions primarily based on the outcomes they produce in the true world” is uncontroversial. However as a result of the New Ideas had been additionally redolent of the Earlier Ideas developed by the Blair Authorities, and since these Earlier Ideas had been embedded extra formally within the regulatory framework (as mentioned under), there was scope for confusion in regards to the authorized standing of the New Ideas.

Quick ahead to the White Paper from Could 2024 and, in reply to the second query, the New Ideas appear to be being joined (or maybe changed) by ten Newer Ideas aimed toward guaranteeing “a well-functioning panorama of regulators”.  In keeping with that White Paper, the next rules ought to be adopted by Authorities departments and may function a pre-action guidelines for regulators:

Clear steerage, transparency and accountability;

Worldwide recognition and consciousness of greatest apply;

Keep away from pointless danger aversion;

All the time act proportionately;

Be pro-innovation in regulatory strategy;

Collaborate and be part of up with fellow-regulators;

Be collaborative and responsive when partaking with companies;

Permissiveness and self-certification;

Guarantee a talented and succesful workforce; and

Perceive how regulation is utilized at native ranges and felt by enterprise and shoppers.

As an indication of its dedication to those Newer Ideas, the Authorities pledged to jot down to regulators who weren’t complying, although the advice within the White Paper did concede that the circumstances through which such a letter can be applicable would fluctuate in keeping with the diploma of coverage and operational independence of the regulator in query.  Therefore, evidently the Newer Ideas had been envisaged as one thing central Authorities may use to information and choose the efficiency of regulators, with some penalties for non-compliance.  Whether or not they had been additionally supposed to set enforceable expectations for the regulated is much less clear.  Once more, although, as a result of they had been harking back to the Blair Authorities’s Earlier Ideas, their standing wants clarification.  To elucidate why, the put up will now flip to the context for these Earlier Ideas. 

Context for the Earlier Ideas

While Brexit and the chance to overview assimilated regulation was the catalyst for the New and the Newer Ideas, a want to control properly to advertise innovation and development was not new.  Ever since Margaret Thatcher’s Authorities got here to energy in 1979 – pledging to “defeat Socialism” and reverse the “anti-enterprise local weather” that included, to cite from Keith Joseph’s speech “Monetarism isn’t Sufficient”, a “remorseless flood of laws and laws” which “shrivelled the impulse to broaden and throttled enterprise” – there have been our bodies on the coronary heart of the UK Authorities mandated to contemplate optimum regulatory methods.

In 1997, as a part of the hunt for what was then branded “Higher Regulation”, Tony Blair’s Authorities got here up with 5 rules, specifically accountability, consistency, proportionality, focusing on, and transparency, that had been used as a yardstick for regulatory reform by the Higher Regulation Activity Power and Higher Regulation Fee within the late Nineteen Nineties and early 2000s.  They had been used to jot down sectoral and topical stories on areas starting from long-term care to motels and eating places, and from higher redress to avoiding regulatory creep.  The go-to doc for an evidence of the which means of the Earlier Ideas is the 2003 leaflet, Ideas of Good Regulation.  In widespread with the New and Newer Ideas, the definitions are considerably fuzzy, although the headline rules themselves profit from being comparatively succinct and straightforward to reference.  As well as, the Earlier Ideas have endured for a while.  That implies that not solely is there not less than some familiarity with their which means amongst regulators and the regulated, but additionally that they’ve acquired a authorized standing through an evolving statutory framework.

Authorized Standing

Importantly for this put up, the Earlier Ideas not solely litter Explanatory Notes to laws, Explanatory Memoranda related to Statutory Devices, impression assessments and consultative paperwork from Ministerial Departments and regulators as coverage justifications.  They’re additionally often present in laws itself, each to border the duties of regulators and to mirror the scope of regulatory obligations extra usually.

Some examples might help.  The Earlier Ideas are the set off for a Legislative Reform Order underneath s. 2 of the Legislative and Regulatory Reform Act 2006.  A Minister could make an order to safe that regulatory capabilities are exercised to adjust to them.  Equally, regulators exercising any perform to which s. 21 of that Act applies should have regard to the Earlier Ideas, in addition to to the Regulators’ Code issued underneath s. 22, the present model of which was designed to “promote proportionate, constant and focused regulatory exercise” and thus aligns with the Earlier Ideas.  The regulators and capabilities caught by this regime are set out in Legislative and Regulatory Reform (Features) Order 2007 (as amended), and the listing isn’t brief.  Because of this, the Earlier Ideas underpin the actions of many regulators within the UK from the Charity Fee to the Pensions Regulator, from the Monetary Providers Authority to the Meals Requirements Company and from the HSE to the Listening to Help Council, and the regulatory actions of Authorities ministers underneath a variety of statutes.  As well as, when taking sure enforcement motion, the requirement to comply with the Earlier Ideas is underpinned by the regime set out within the Regulatory Enforcement and Sanctions Act 2008.  In an effort to bestow energy on a regulator to challenge civil sanctions, shorthand for the ability to challenge mounted financial penalties, discretionary necessities, cease notices and enforcement undertakings linked to the Macrory Report, the related authority should be glad, underneath s. 66, that the regulator will adjust to the Earlier Ideas as set out in s. 5(2) of that Act.  Therefore, the Earlier Ideas kind a part of a usually coherent meta-regulatory framework, however it’s not clear how the New and Newer Ideas are supposed to suit into this regime.  Are they extra concerns for policy-makers and regulators?  Or are they supposed to interchange the Earlier Ideas?    

The Earlier Ideas additionally seem in Acts referring to particular regulatory regimes, and right here the scope for confusion is bigger as a result of the New and Newer Ideas may additionally come into play intentionally or inadvertently.  Take Ofcom’s duties underneath the Communications Act 2003.  Part 3(3) supplies that:

“In performing their duties underneath subsection (1), OFCOM should have regard, in all instances, to—

(a) the rules underneath which regulatory actions ought to be clear, accountable, proportionate, constant and focused solely at instances through which motion is required; and

(b) another rules showing to OFCOM to signify the most effective regulatory apply.”

It isn’t clear whether or not s. 3(3)(b) due to this fact incorporates the New and Newer Ideas into the statutory regime.  Is it now prompt that OFCOM will be legally challenged if it doesn’t take regulatory selections in such a method as to make sure it’s “main from the entrance” or being “pro-innovative”?

In R (Gallaher) v The CMA [2018] UKSC 25, [50], Lord Sumption warned of the significance of not unnecessarily multiplying classes of public regulation and, citing Lord Hoffmann in Matadeen v Pointu [1999] 1 AC 98, he referred to a requirement for consistency, being the related precept at challenge in that case, as a “basic axiom of rational behaviour”.  Certainly, it is perhaps doable to suit a failure to comply with a few of the Earlier, New and Newer Ideas right into a rationality evaluation.  Maybe a regulator who was unnecessarily danger opposed, or who took a call in ignorance of worldwide greatest apply, would, within the phrases of Lord Diplock within the GCHQ case ([1985] AC 374), be taking a call that’s “so outrageous in its defiance of logic or accepted ethical requirements that no wise one that had utilized his thoughts to the query to be determined may have arrived at it.”  However rationality is a excessive bar, and it’s notable that whether or not it’s Wednesbury unreasonable to behave disproportionately or whether or not proportionality ought to be adopted as a definite floor of judicial overview is a vexed query.  It may also be doable to suit some parts of transparency and maybe “being collaborative and responsive when partaking with companies” and “understanding how regulation is utilized at native ranges and felt by enterprise and shoppers” into grounds historically falling underneath the heading of procedural impropriety.  Nonetheless, it’s not less than debatable that sure regulators caught by s. 21 of the Legislative and Regulatory Reform Act might be appearing extremely vires in the event that they had been to behave disproportionately, inconsistently, un-transparently and so on. The OFT was not topic to that part for regulatory capabilities underneath competitors and merger regulation and so the problem didn’t come up within the Gallaher case. It is usually debatable that these working underneath legislative frameworks equal to the Communications Act may discover their authorized obligations prolong additional. After all, for judicial overview, it could have to be “extremely doubtless that the end result for the applicant wouldn’t have been considerably completely different if the content material complained of had not occurred” underneath s. 31(2A) of the Senior Courts Act 1981, however that’s not inconceivable, particularly in areas round worldwide greatest apply and innovation.  For statutory appeals mechanisms, the wording of the related Act and related appeals regime would have to be thought-about.  Nonetheless, the potential for a call to be mistaken in regulation as a result of a precept has been ignored or misapplied stays.  Better readability of the applicability of the New and Newer Ideas, their interrelationship and their relationship with the present regime is required.

Conclusion

It is very important take inventory of the regulatory panorama within the UK put up Brexit and to mirror on the suitable rationale for regulatory intervention by central Authorities and regulatory our bodies.  It isn’t the intention of this put up to argue for a selected rationale to be adopted.  That may be a political choice for the newly elected Authorities to find out.  Nonetheless, it’s key to be clear what authorized standing and which means is attributable to any guiding rules that emerge from a overview of this space and to make sure a coherent regime outcomes.  At the moment, the potential for uncertainty in regards to the which means, applicability and authorized standing of the New and Newer Ideas dangers being detrimental to the purpose of smarter regulation.

With due to Mike Gordon, Paul Scott and Se-shauna Wheatle for his or her useful feedback on an earlier draft. 

Kate Ollerenshaw is a Lecturer on the College of Hertfordshire

(Instructed quotation: Ok. Ollerenshaw, ‘Smarter Regulation: A Proliferation of Ideas’, U.Ok. Const. L. Weblog (seventeenth July 2024) (accessible at https://ukconstitutionallaw.org/))