Right Touch Regulation – A Glass Half Full
We’ve attended a number of trade fairs and exhibitions in recent weeks – an opportunity to keep up-to-date with the latest trends and developments in different industry sectors, and of course, network amongst suppliers and buyers. One of the topics that often comes up is of industry regulation, and it’s usually in a negative context (“we can’t do this anymore…..now we have the extra hurdle of having to…..it takes forever to comply with….). It’s almost as if regulation has become synonymous with ‘red tape’, and getting in the way of economic growth.
At the other extreme, too little regulation can have disastrous consequences. The UK Financial Services Authority (FSA) was forced into a costly restructure by the new Coalition Government, following its failed “light-touch” regulatory approach, in which British banks had to be bailed out by the UK Government at taxpayers’ expense.
It was Peter Mandelson, ex-Secretary of State for Business, Innovation and Skills who in 2009, with a characteristically charming phrase stated “We used to talk about light touch: now it’s going to be about the right touch”.
But what is right touch regulation? And what should its goals be?
Safety is often, rightly, a regulatory start point. Yet it must be set in the context of the potential benefits of the activity it is regulating. In other words, it should be proportionate to the problem it is trying to solve. Our extensive work in healthcare, one of the most regulated industries of all, has taught us that, in an uncertain world, there is no such thing as ‘safe’, only safe enough. This then requires careful and informed judgment for determining appropriate safety levels:
"We need to place responsibility for deciding what is safe enough in the right place, where decisions are made, we need to hold individuals and organisations to account and we need to use regulation only for those things where its effect is demonstrably good."
Harry Cayton - Chief Executive - Council for Healthcare Regulatory Excellence
However, we should not perceive regulation as simply a guardian against bad practice. Instead, it can have a positive role, providing a framework that encourages honesty, transparency and consistency – all values that consumers welcome, and businesses should aspire to.
We also strongly believe that regulation benefits should be measured in a more holistic way than purely financial metrics. From the perspective of consumer protection, the European Consumers’ Organisation (BEUC) offers a strong and well-balanced definition:
"BEUC calls for a re-definition of smart regulation to mean fair, transparent, evidence based, accountable, citizen-centred policy making that brings tangible benefits to consumers and improves their quality of life. Smart regulation should not only be restricted to businesses benefits but it should be seen as a means to introduce well thought, effective and proportionate measures to increase consumer protection, improve the quality and safety of goods and services and move faster towards a green economy."
In the future, we are optimistic that right touch regulation will be seen by businesses as a positive force, and an opportunity to demonstrate responsible brand values and behaviours to its customers.