Regulatory Reform Business Questionnaire - Which? Response

Consumers rely on effective regulation - and effective regulators - to ensure that they are treated fairly and can engage confidently across a broad range of markets. Unnecessarily burdensome, unclear or ineffective regulation is not in consumers’ interests as it can put consumers at unnecessary risk or lead to additional costs being passed on to consumers, whose participation and welfare are fundamental to economic success. Any regulatory reforms must therefore be driven by a robust, evidence-based approach that prioritises consumer protection and safety. 

There is likely to be scope to streamline some requirements on businesses, including removing duplication and making regulatory processes more efficient. This will make compliance easier for the benefit of businesses and consumers. The focus should, however, shift from a quantitative "counting exercise" of administrative burdens to ensuring regulation is well-designed and enforced to achieve its policy goals. 

In some sectors, an increased focus on outcomes or principles-based regulation can help to future-proof the obligations that are placed on businesses. But greater prescription will also be needed so that businesses are clear what they need to do to comply and consumers can have confidence that the broad range of businesses they engage with understand their obligations. There are also opportunities to ensure a level playing field where some businesses are caught by the rules and others are not (eg. online marketplaces do not currently have the same responsibilities for ensuring the safety of the products sold on their sites as more traditional retailers) and where some businesses ensure that they are compliant with legislation and others are able to get away with non-compliance because of the weaknesses of the enforcement regime. 

The primary indirect cost to businesses, that has serious consequences for consumers, is not the rules themselves, but the lack of effective, risk-based, and predictable enforcement. This allows unscrupulous businesses to thrive and undercuts compliant firms, leading to a loss of consumer trust. There are significant opportunities to reform consumer enforcement so that it better serves both consumer and business interests, particularly in the case of Trading Standards Services (TSS) and their relationship with national regulators. Our response highlights a "postcode lottery" as a result of the long-term decline and fragmentation of these Services. Some fundamental structural reforms will help to ensure that the regime is more appropriately resourced, risk-based and predictable for both businesses and consumers:

Greater responsibility should be moved to national regulators for the most complex businesses operating nationally. 

• ‘Black holes’ in consumer protection and business support should be addressed by the consolidation of resources into strategic regional/ national hubs that have the resources and expertise to tackle local crime and proactively address consumer harms.
• The remit of national expert teams should be reviewed and strengthened so that they address the areas of highest detriment and have the necessary powers.

There are some short term actions that we think will help lay the foundations for these reforms and ensure that they are effectively targeted: 

• All local authorities should be required to collect data and share intelligence on the enforcement action they are undertaking and risks that are emerging locally.
• Cross-government priority national outcomes and metrics should be agreed and local authorities should be required to report on how they are delivering against these, including providing regular public data on staffing levels and enforcement action.

As it stands, the government does not collect data on how many Trading Standards Officers are operating in any given area, the enforcement action these officers are prioritising, and the number of criminal prosecutions these teams are undertaking. Without a clear understanding of this foundational data, it is impossible to measure the effectiveness of how national regulations are being enforced locally as per the terms of reference of this call to evidence. These reforms are essential to restore the consumer trust upon which all legitimate businesses rely.

While supporting economic growth, regulators must also maintain their independence and statutory duties to put the public interest first. The proposed 'growth duty' must not be confused with industry promotion, which could repeat past failures (eg. the Bovine Spongiform Encephalopathy (BSE) crisis or 2008 financial crisis).