Regulators are the new dictator class of our society

Regulators are the new dictator class of our society

By Sir Richard Lapthorne 17th June 2015

“I was encouraged last month by the pronouncements from Sajid Javid, our new Business Secretary. He has promised an Enterprise Bill that will cut the cost of red tape by £10bn a year and tackle the powers of independent regulators.

I remain sceptical though. Every Business Secretary promises to cut red tape. To date none have achieved it.

They sit like a succession of King Canutes ordering the tide of regulation back, but it rolls inexorably forward, as it has done for decades.

In his 2014 Annual Report Sir Mark Walport, the Government’s Chief Scientific Adviser, said that to create the conditions to support innovation we need to to manage risk, not avoid it.

The only perfect way of managing risk is to avoid it and unfortunately there is a section of the regulation industry that will only accept perfection.

Innovation matters; it is the lifeblood of an economy. Innovation leads to increases in total factor productivity, which contributes to real growth. Sir Mark has supervised a good deal of research into the subject and has concluded that the growth in so-called “Soft Law” in the UK, and its focus on avoiding failure, is killing innovation.

As a term, soft law covers a collection of rules and codes developed by regulators. Regulators rely on the continued growth in soft law so they can stand in the way of exactly the type of risk-taking that Sir Mark wants to see.


Professionally-run regulation is a means for maintaining a balanced society. However, the zealots who behave in a non-transparent and unfair manner cannot be allowed to mimic dictators of old. Like those dictators they too can destroy lives by exercising unrestrained power.

Sir Richard Lapthorne is chairman of Cable & Wireless Communications


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