Regulators must be kept in check, Tory MPs warn
Tory MPs have warned powerful regulators operating “largely unchecked” are holding back the UK’s economy and “directly hindering” the country’s growth prospects.
The backbench Regulatory Reform Group (RRG) has called for increased parliamentary oversight of the UK’s regulators – from water and energy watchdogs Ofwat and Ofgem to banking supervisor the Financial Conduct Authority (FCA).
Hitchin and Harpenden MP Bim Afolami, who founded the group in November 2022, said: “Unaccountable regulators are directly hindering the UK’s growth prospects.
“Regulators have the potential to be key drivers of the government’s long-term ambitions for the UK, not to mention enablers of economic growth, but without adequate oversight from parliament, this potential has been lost.”
Afolami said he wanted to ensure regulators were working effectively for consumers and contributing to the government’s priorities.
In a report, the nine-strong group said regulators now wielded huge power and influence over the UK’s economy and society, but faced little democratic scrutiny of their decisions.
Moreover, regulatory aims often diverged from the government’s priorities, such as the planning system working against levelling up and housebuilding goals, the RRG said.
Lord Tyrie, the former chair of the Competition and Markets Authority (CMA), said: “Too many decisions – taken by powerful, anonymous quangos, and affecting millions of people – go scarcely scrutinised and inadequately explained.”
‘Timely report’
MPs called for more dialogue between government and regulators; an “accountability framework” to measure regulators’ performance; and an “outcomes-based” approach to future regulation, allowing further innovation while protecting the rights of consumers.
They also said regulators needed to be properly staffed and resourced, but acknowledged this was difficult given restraints on pay.
City minister Andrew Griffith welcomed the report, saying: “This is a timely report which clearly sets out the opportunities from getting regulatory systems right.
“In financial services, the government is via the Financial Services and Markets Bill already taking steps to align regulators’ objectives, improve their accountability and to focus more on outcomes.”