With Labour<\/a> back in power, Gordon Brown celebrated a light-tough regulatory regime for the UK\u2019s hard-driving financial sector \u2013 until the Treasury had to bail out the banks after the 2008 financial crisis.<\/p>\n Boris Johnson wanted to unfetter Britain\u2019s businesses from \u201cBrussels bureaucracy\u201d and waffled on during the Brexit campaign about bendy bananas. Yet, after Brexit, business groups said their members would rather comply with longstanding EU standards in many areas than adopt an entirely new UK regime. And bananas are no more or less bendy than before.<\/p>\n Rachel Reeves had a more unpleasantly graphic way of making a similar point, referring to regulation as a \u201cboot on the neck\u201d<\/a> of British business.<\/p>\n There is nothing wrong with ensuring the interaction between business and the state is smooth. But even during the early years of neoliberalism, the free market good, regulation bad dichotomy was always unhelpful, for several reasons.<\/p>\n First, good regulation \u2013 a robust competition regime, for example \u2013 is essential to make markets work well. And even most enthusiasts for a laissez-faire approach would acknowledge the need for some basic quality standards \u2013 for food and medicines, for example.<\/p>\n When it comes to the labour market, Labour has unashamedly adopted a pro-regulation stance. Its Employment Rights Act<\/a> is the most significant increase in workers\u2019 rights in a generation \u2013 but it inevitably, and deliberately, increases the rules firms must follow.<\/p>\n That is to the benefit, ministers rightly argue, of low-paid employees trapped in insecure work. But a bonfire of red tape it is not. Labour posing as a champion of deregulation will seem unconvincing, given that context.<\/p>\n Second, and ironically, the march of neoliberalism itself is a reason regulation has mushroomed in recent decades. As the Labour MP Yuan Yang argued in a recent lecture<\/a> for the journal Renewal, as the state retreated from providing important services, watchdog institutions to oversee the private sector became necessary.<\/p>\n As she put it: \u201cThe neoliberal illusion, that privatisation liberated markets from state interference, obscures the reality that the state already significantly controls our privatised utilities, but through a maze of arm\u2019s length regulatory agencies which operate outside democratic influence.\u201d<\/p>\n For the water sector, privatised in 1989, these include Ofwat, which sets bills (with the Competition and Markets Authority acting as an appeals body in the event of a dispute); the Drinking Water Inspectorate; the Environment Agency; and the Consumer Council for Water.<\/p>\n Yet, as Yang points out, none are responsible for drawing up a coherent plan for the sector as a whole. \u201cEveryone knows how this story ends: with our rivers polluted and our water infrastructure dangerously lacking.\u201d<\/p>\n
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