Apparently, government advisers think reforming the UK’s corporate governance and audit market is “boring”. The loss of 9,000 jobs when Thomas Cook, the travel operator, went bust, or Carillion’s monumental and chaotic collapse just months after a sign-off by KPMG, are seemingly too niche issues to win votes. Which is a strange conclusion to reach, given that clamping down on accounting scandals was part of the Conservatives’ successful 2019 manifesto. Instead, Tuesday’s Queen’s Speech introducing the government’s legislative agenda for the next parliamentary session demoted plans for audit reform to a draft bill, meaning it will not become law until the 2023-24 session at the earliest. This, despite four years, three major reviews and a white paper, as well as rare consensus between regulators, companies and audit firms that new rules are needed, urgently.
Plans for proper policing of Big Tech are similarly delayed. They would give the competition watchdog’s Digital Markets Unit statutory teeth and the ability to set bespoke conduct rules for large tech companies. Dithering means that the UK has allowed itself to be outpaced by the EU, which has pushed through swingeing new rules. Plans to create an independent football regulator look also to be kicked down the road, with vague promises to publish proposals.
There was no mention of a long-awaited employment bill, which also featured in the last manifesto and would create a single enforcement agency to oversee workers’ rights. P&O Ferries’ recent flouting of labour law by summarily firing 800 British-based seafarers has prompted the government to pursue ill-considered legislation to outsource oversight of sailors’ minimum wage to ports. But it was not enough of a scandal to make the government deliver on its promise of an employment watchdog that could take meaningful action against unscrupulous companies that currently enjoy negligible consequences for breaking the law.
A delay may seem preferable to outright scrapping. But plans that are deemed not to be vote-winners now are hardly going to be so in 2023-24, when the next general election will be imminent and brutal priorities will be made. The paring back of the agenda suggests the brutality has already begun.
A government, such as Boris Johnson’s, distracted by scandal, bruised in local elections, and facing a cost of living crisis as well as a war in Ukraine, is right to prioritise. Some of its plans have merit, such as allowing gene editing of animals and plants, and permitting student loans no matter what age. Some are incomplete as well as overdue, such as its economic crime bill. But discarding much-needed reforms is a false economy. It makes no sense when the overstretched government still makes time for dubious policies, such as the privatisation of Channel 4.
The jettisoned regulatory plans may not excite the base of a party whose instinct is to cut red tape. David Canzini, a deputy chief of staff to the prime minister, has reportedly stipulated that Tory governments “don’t legislate their way to economic growth”. Canzini is vetting proposals — audit being judged too boring — and wants aides to look for “wedge issues” to differentiate the government from the opposition.
A government’s success should not be measured by the amount of legislation it creates. The last parliamentary session suffered from poorly drafted, voluminous bills. But creating readily comprehensible and swiftly enforced rules supports companies that want to do the right thing; it does not unduly burden them. Such reforms would genuinely improve the UK as a place for doing business — unlike “red meat” issues designed to keep backbenchers onside.
