Everyone in British politics seems to agree that regulation and the regulators are failing, but for different and seemingly contradictory reasons.
In water, regulators are accused of being too weak, allowing investors to extract value from Thames Water while pipes leak and rivers are polluted. In nuclear energy, they are accused of being too burdensome, miring companies in rules and process that prevent investment. In financial services, they have been accused of being both too weak and too tough – with lax regulation contributing to the global financial crisis and excessive regulation now undermining the competitiveness of the UK’s financial services sector.
How can we make sense of these apparently contradictory critiques? In my latest essay for the Social Market Foundation I explore what has gone wrong with British economic regulation in past four decades, and what can be done about it. The lessons include some uncomfortable truths for the right and for the left, as well as for the regulators themselves.
You can read the essay here.
