HM Government’s Plans for Regulation

This House of Lords Library Briefing provides an overview of regulation in the UK, including former and current Government policies, recent debate on deregulation and the potential implications on UK regulation of the UK’s exit from the EU.

This briefing has been prepared in advance of the debate scheduled to take place in the House of Lords on the following motion tabled by Baroness Neville-Rolfe (Conservative): “to move that this House takes note of Her Majesty’s Government’s plans to ensure that regulation is balanced, cost-effective, easy to understand, and properly enforced”. 

Regulation is a broad term for a range of tools that governments can use to intervene in markets. The primary purpose of regulation is to address market failures which result in outcomes that are not in accordance with public good or intended policies. Regulation can take various forms, ranging from prescriptive government-led intervention to market-led incentives and codes of practice. 

The Coalition Government introduced policies intended to reduce the costs to businesses and civil society of complying with regulation. This included the Red Tape Challenge and a ‘one in, one out’ policy, under which any new UK regulation which imposed a direct annual net cost on businesses or civil society organisations would have to be offset by the removal of existing regulations with an equivalent value.  

The subsequent Conservative Government continued the Coalition Government’s policies of examining areas where the costs of regulation could be reduced. The Government was also required by law to publish a target for reducing the cost burden of regulation, known as the Business Impact Target. The Government, then led by David Cameron, published a target of reducing the cost to business of regulation by £10 billion by 2020. The Government has been criticised for excluding certain high-impact measures, in particular the National Living Wage, from the calculation and presentation of the target. 

The European Union (Withdrawal) Bill, currently progressing through Parliament, provides that all European Union (EU) law will become part of UK law when the UK leaves the EU. As a result of the UK’s withdrawal from the EU, UK regulatory bodies may have to take on new functions and new bodies may have to be established.