On 4 October we brought together experts to discuss regulation and Britain’s relationship with Europe and to share their views on the key issues facing regulators following the UK’s exit from the EU.
Regulation matters
Regulation affects us in a variety of ways and effective regulation is important to protect people in their daily lives. The UK’s exit from the EU means that EU regulatory structures are no longer accessible and the UK must now largely set its own regulations. This new autonomy brings both challenges and opportunities.
What are the issues?
The discussion at our webinar highlighted several issues. There is a need for a post implementation review of regulations to ensure that there is a good understanding of the impact of changes. This monitoring and evaluation will support policy enhancement at the next refresh.
There are many regulations in the UK that are not European, but the current focus is to realise the benefit of exiting the EU and to look at regulations the UK has inherited and retained. Many of them were EU regulations that were turned into UK laws by the withdrawal act, and many others were created under Section 2 of the European Communities Act as a way of implementing EU directives.
The proposal for the stock of existing regulation and the Retained EU Law Bill have now been introduced to Parliament, with the expectation that it will receive royal assent by the autumn of next year.
It was hoped that a careful look at the powers, duties and obligations of regulators will help create some “horizontal consistency” (consistency at a European level) on the importance of competition, innovation, Net Zero and other key policies. It should also help regulators to collaborate and communicate with one another.
Operational challenges
There was reflection on the operational challenges faced by regulators including:
- Significant workloads for regulators post EU exit (for example, applications for regulated products or registration of new companies)
- Skills and capacity shortages are exacerbated by increasing workloads
- Replacing EU systems particularly around gathering soft intelligence or a soft understanding of risk
- Navigating issues following the loss of the ability to look across systems such as seeing what food alerts exist across other countries, or the UK’s participation in information sharing on competition and merger cases.
- Regulators need resources. The consensus was that regulators need appropriate resources, skills and toolkits to deliver effective regulations consistently and efficiently.
Priorities for regulators
The panel felt that the three key priorities for regulators are to:
- Recognise how consumer protection is central to sustainable economic growth and for regulation not to be perceived as a burden to businesses
- Identify the risk against which regulation is needed and then design a regulatory system to manage that risk
- Create a defined set of principles to work towards. Determine the clearest cost benefit analysis in favour of introducing that change or regulation.
Finally, we would like to thank our keynote speaker, Chris Carr, Director of the Brexit Opportunities Unit and the event panellists:
- Rachel Merelie, Senior Director, Competition & Markets Authority
- Sue Davies, Head of Consumer Rights and Food Policy, Which?
- Joël Reland, Research Associate, UK in a Changing Europe
- Sarah Pearcey, NAO Audit Manager, co-author of the NAO report ‘Regulating after EU Exit’.
Video
Video transcript (doc – 92 KB)
Find out more
Our report, Regulating after EU Exit, formed the basis of our webinar. It examined the early experience of regulators who were heavily impacted by the UK’s departure from the EU.
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Authors
Matthew Rees
Matthew returned to the NAO in 2021 to lead our Commercial Insights team, having previously overseen our work on the government’s corporate finance activities.
His commercial experience spans Big Four audit and valuations, global investment banking and as a non-executive director and audit and risk committee chair in an energy sector consultancy.
In the public sector Matthew has worked on merger and market investigations at the Competition and Markets Authority (CMA) and economic regulation in the telecoms, water, aerospace and defence sectors.
Matthew represents public sector issues as a co-opted member of the Institute of Chartered Accountants in England and Wales (ICAEW) Council.
Lilian Ndianefo
Lilian’s work at the NAO has included public sector company audits, audits of government departments, supporting the setting of the Local Audit Code and developing guidance for auditors of local government and NHS bodies.
Before joining the NAO, Lilian had many years of experience managing a large portfolio of corporate multinationals for one of the Big Four audit firms.
