Utility Week

UTILITY WEEK | DECEMBER 2022 | 25 Regulation Brexit allows us to rethink regulation The head of the Environment Agency calls for the UK to grasp the "opportunity" of leaving the EU. Chief executive's view Sir James Bevan, Environment Agency E veryone has a plan until they get punched in the mouth. And in my experience everyone dislikes regulation until they need it, and then they want even more of it than we regulators can supply. All the politicians I meet, all the media that scrutinise us, and all the local communities in which we operate want more not less regulatory action from the Environment Agency (EA) to tackle things like waste dumps, smelly factories, dirty rivers and so on. It's a good problem to have. And a reminder that the answer you get to any question o•en depends on how you ask it. Does any of us want red tape and bureau- cracy? No. Do we want clean water, air that's safe to breathe, a green country, jobs and growth? Yes – and those are some of the things you get from regulation when it's done right. But no regulatory system is perfect, including ours. Brexit is a massive opportunity to rethink how we do regulation in this country. The government has embarked on that process, and we welcome the debate. I want to suggest some pointers about where that debate might usefully take us and the key principles that I think should guide it. Let me start with an important fact: regulation works. Examples: Water security: the EA regulates the abstraction of water in this country. If you want to take more than 20 cubic meters a day out of a river or the ground, you need an EA licence. The EA has been reviewing, changing and in some cases revoking these licences to bring them into line with what is sustainable. That has removed the risk of the abstraction of some 1.7 trillion litres of water. That's enough water to supply London for two years. Nature, wildlife and all of us are better off as a result. Water quality: in 2021, due to the EA's regulation of water companies, a record 99% of bathing waters around England's coasts met or exceeded the minimum quality standard. That is the highest level it has been since new tougher standards were introduced in 2015. Thirty years ago most of our bathing waters would have failed to meet even the minimum standards we have now. Regulation did that. Climate: in 2021 the climate change emissions trading and energy efficiency schemes that the EA manages delivered a nine million tonne reduction of CO2 com- pared to 2020. And since 2010, emissions of greenhouse gases from the sites we regulate have decreased by 50%. The planet is better off as a result. Regulation works. But no regulatory system is perfect. Both the regula- tions themselves and how regulators behave need to move with the times. They need to reflect changes in technology, in the needs of business, in the risks we are trying to manage, in public demand, in government policy and the law, and in the wider world around us. The government has embarked on an exercise to remove, revise or retain the body of EU-derived law currently in force, much of which is the basis for most environmental regulation in this country. We welcome that. We think it is a great opportunity to deliver better regulation and better outcomes. There is already a big debate as to what pieces of legislation should be retained, what should be reformed and what should be repealed. And there should be a debate, because this really matters and because if we make the right calls we can do what the Environment Agency exists to do: create a better place. Principles of good regulation As we debate what kind of regulation we want for the future, let's be guided by a few principles. • Reframe how we think. Good regulation is not red tape. It's what gets you green growth and a blue planet. • Focus on outcomes. Start and finish with the ones we want: safe and healthy people, nature restored (not just protected), sustainable and inclusive growth. • Believe in better. The test for any regulatory change should be whether it will produce better outcomes. • Less is more. Have fewer regulations, better targeted. Regulate only the things that need regulating. • Do it right. When you do have to regulate, do it well. Good regulation is proportionate, risk-based, evidence-driven, outcome focused, and (provided businesses do the right things) business-friendly. • Strong regulation needs strong regulators. If regula- tors are going to do their jobs they need the right powers, resources and support. Ronald Reagan said that government's traditional view of the economy could be summed up in a few short phrases: "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it." He was, it is pretty safe to say, not a natural fan of regulation or indeed of government. But he also said: "Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves." That's a good distinction. Regulation doesn't exist to protect us from ourselves. It exists to protect the things we value – people, nature, our economy – that would otherwise be harmed. This is an edited version of a speech given by Sir James Bevan, chief executive of the Environment Agency, at the Whitehall Industry Group in November

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