Britannia waives the rules? The UK is a ‘buccaneer’ when it comes to tech regulation, claims Brexit leader

Brexit Britain is a “buccaneering, free-trading nation”. So said Chris Carr, Director of the UK Government’s Brexit Opportunities Unit, in his keynote at a Westminster Business Forum this week on regulating emerging technologies.

The suspicion that Carr thought ‘buccaneering’ meant ‘adventurous’ was rather undone by its actual meaning: buccaneers were 17^th-18^th Century pirates (of the Caribbean, no less), looting from passing ships.  So, ‘buccaneering’ may be a synonym for ‘bold’, but only in the sense of risky, dishonest, and unscrupulous. Is that the message the Department for Business, Energy and Industrial Strategy (BEIS) wants to send the world? That Britannia no longer rules the waves, but waives the rules?

I felt that Carr came across as both combative and patronizing as the UK rides the heady crest of a 0.5% fall in GDP growth, according to July figures from the Office for National Statistics:

There's a point I'd like to make about the Darwinian aspect of regulations. When you're a bloc of 27 member states, you can turn bad regulations into global standards through sheer economic and political heft. But when you're a buccaneering, free-trading nation the size of the UK, your regulations are only going to work and lead the world if they are the best and most useful.”

Fascinating. Especially as that dig at the EU acknowledged its greater political and economic power, while being vague about which regulations are bad. 

It also ignored an inconvenient fact: Darwin style, evolution proceeds from common ancestors. And that applies to regulations too. 

The EU remains by far the UK’s biggest trading partner – the US is the largest nationally, but Europe accounts for eight of Britain’s top 10 partners. So, tearing up regulations only works if you plan to ignore most of your significant markets. Fine-tuning and simplifying would seem to be the pragmatic approach.

Even US businesses and the EU’s own trading partners would prefer to address all of Europe, including the UK, as a single bloc in terms of rules and standards. Why? Because it’s cheaper and logistically simpler. 

But governments can only do three things, said Carr: tax, spend, and regulate. Politically, the UK seems disinclined to do the first two, so that leaves regulation: the very activity that enables trade to take place on mutually agreed terms.  Carr explained:

There are tens of thousands of regulations on the statute book, many of which – possibly even the majority, I don't know – were created through our membership of the European Union.

In recent years, the UK Government has talked up a bonfire of EU regulations – a promise that now seems increasingly like hot air – while also signalling that it wants regulators to err on the side of innovation, enablement, and growth, rather than protecting citizens from corporate overreach. 

However, even right-wing, neoliberal thinktanks, such as the Adam Smith Institute, accept that big business adores large-scale, regional regulation, because it enables trade. They also point out that small businesses dislike it, as it costs them money. 

Perhaps, but the traditional growth path for the UK’s small enterprises and start-ups used to be through Europe, and that path is now slower, more bureaucratic, and therefore far more expensive. Tearing up the regulations that still govern that trade seem unlikely to improve things.

As for what Carr had to say about the landscape for new technology – and the regulations that cover it - he went on: 

What we're calling for today is the Smarter Regulation program. We have, once again, been set the task of finding regulations that can be improved or removed through the opportunities presented us by Brexit. [Reports in recent years] allege a set of systemic problems in regulators: risk aversion, overly bureaucratic, too slow, not responsive enough, not good at dealing with new technologies or with paradigm-breaking business models, and so on. 

But we want to get a better evidence base before we make any significant policy changes. Particularly the thing about, you know, heterogeneous legislation. That is going to need Bills to fix – if it needs to be fixed. And if it makes it easier to have a harmonised and more easily understood set of powers.  So, what we are doing is seeking to publish a call for evidence in the fairly near future. I hope very much hope that it will be live before Christmas. 

He added: 

We want to engage with businesses. But we know that businesses are generally reluctant to fill in government surveys because they don't have the time and they don't believe that anything's going to happen. So, we're trying to make this an exception, a bit like the Red Tape Challenge of 10-12 years ago. 

We want this to be the biggest dialog that government is having with businesses, about their experience of being regulated. Obviously, we're happy to hear from policy thinktanks and regulators themselves, plus local authorities and others. But the core audience is businesses who are subject to regulation, because we want to know what their issues are.

Wow. A significant and – some might say – long overdue shift of emphasis from Whitehall. From the posturing and bank-bench declaiming of the early Brexit era, to actually finding out what the problems are. In other words, a shift from telling businesses what’s wrong to simply asking them.

As long as the problem isn’t, ‘It’s much harder, slower, and more expensive to sell into Europe now’, of course.  To his credit, Carr acknowledged that there are challenges ahead:

My personal view, from six or seven years working in this area, is that it's actually quite rare for businesses to come to government and say, ‘We need you to repeal the 1997 [the year Tony Blair came to office] such and such regulation’. They don't generally say that. 

What they do say is, ‘We accept that regulation is a normal part of having a civilised society. And we accept that there are going to be regulations. But we want them easier to understand and easier to comply with.  We want more transparency, we want better feedback, and we want consistent treatment.’

So, the call for evidence is designed to ask businesses what the problems are. It will obviously have to be anonymous, so that businesses and other respondents can say what they really think without fear or favour.

He added:

I hope it will be allowed to run on an ongoing basis, like the Red Tape Challenge, so that we can continue to get into diligence [sic] after we have formally closed the exercise. But there will be a formal government response and a policy statement setting out what we're going to do about these issues.

Clarity! Good news. So, might there be a plan to reduce the 90-odd number of regulators – according to Carr’s own figures? He said:

I'm not privy to any confidential information about explicit plans to do that. But I wouldn't be surprised.

My take

Some might find supporting evidence of the alleged politicisation of the British Civil Service under this government in this senior civil servant’s words: buccaneers, Darwin, digs at Europe’s bad regulations, and even an implicit one at former Labour Prime Minister Tony Blair. 

But aside from that guess what? It turns out that the government finally wants to find out what Britain’s problems actually are! 

What if they turn out to be Brexit?