Why we all need regulation
This afternoon, I attended a workshop convened by the National Consumer Federation to debate the question “Are regulators failing consumers?” and to start the process of producing a Consumer Charter For Regulators. I was there in my capacity as a member of the Communications Consumer Panel.
in my break-out group, I argued that the Charter should begin by restating the need for regulation. So many business interests and quite a few politicians argue that regulation is an excessive cost on business that is overly intrusive and onerous. The simplistic mantra is often that we should have ‘light touch regulation’. In fact too little regulation can be a cost for consumers, citizens and the economy as a whole and what we should be talking of is ‘right touch regulation’.
Inadequate or ineffective regulation can be a cost:
- on consumers, because for instance inadequate competition and/or complicated switching processes can mean that consumers pay more than they should for services such as gas, electricity, or pay television
- on citizens, because for instance weak health & safety regulations can mean more accidents and more deaths and weak environmental regulations can mean flooding of homes or dirty beaches
- on the economy as a whole, because for instance wholly inadequate financial regulation required the taxpayer to spend £76 billion on bailing out UK banks and a grand total of £850 billion to sort out the financial mess [for details see here].