Mary Creagh

Working hard for Wakefield

Enterprise Bill should not risk effective regulation

The government has embarked with great fanfare on a drive to reduce the burden of regulation on business with the Enterprise Bill. As chair of the Environmental Audit Committee, I am particularly concerned about one of the less well-known changes. The bill forces regulators to have regard to the growth duty and to report on the impact of their regulation on business, which could have unintended consequences for our natural environment. It will also mean that, for the first time, the Government’s Business Impact Target will cover regulators. As a member of the Enterprise Bill Committee, I tabled probing amendments. Deregulation must not come at any cost to our natural environment.

Let’s take Natural England. Its statutory purpose is to “ensure that the natural environment is conserved, enhanced, and managed for the benefit of present and future generations, thereby contributing to sustainable development.” It is clear that its statutory purpose is to protect the natural environment, while the contribution to sustainable development - which includes economic considerations - is a consequence of that protection.

There is clear potential for the growth duty to have an overriding or undermining influence on the proper exercise of Natural England’s regulatory functions. The clearest manifestation yet came as it adopted a new outcomes approach for the protection and management of our most important wildlife sites in October 2015. The stated aim is for Natural England to move “away from being seen as regulators and more towards enablers” through “closer working with business to help them achieve their goals while also helping the environment”. That will apparently involve “radically reducing the need for regulation”, and helping businesses to “achieve their aims in a way that benefits the environment, but takes account of their circumstances” by seeking “the best outcomes for everybody, at the right pace”.

While it is right for Natural England to seek to minimise conflict and to achieve win-win outcomes through the agreement of “common and shared objectives” when possible, there will often be situations where the objectives of businesses will conflict with Natural England’s proper exercise of its regulatory functions and statutory purpose.

In its rush to deregulate, the government risks forgetting the benefits of good environmental regulation to business. The Environmental Audit Committee’s 2014 Environmental Scorecard Report argues that, “Regulation is the essential underpinning of environmental protection. Many of those affected welcome regulation that is strong and consistent because it produces a level playing field and greater certainty for business.” Good regulation – say increasing taxes on waste to landfill, or setting carbon budgets – can actually create the conditions for new businesses to enter the market, and for established companies to invest for the long term. One current example is the European Commission’s Circular Economy Package. It aims to end the throwaway society by creating a virtuous circle of producing, consuming and recycling. The benefits of waste reduction aren’t just environmental but economic as the regulations and targets will open up new markets, incentivising innovation and investment. Across the EU, McKinsey & Co. estimate that the package could increase GDP by as much as seven per cent by 2030.

People want to do the right thing in this country. We are lucky to have businesses that are law-abiding and wish to do well on the basis of good business, good growth and green growth.

The UK should be a leader, not a laggard, when it comes to good regulation that boosts our economy, safeguards the public interest, and protects our environment. The Enterprise Bill should not put that at risk.


First published by the ENDS Report on 11th March,

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