The challenges of reforming parliamentary regulation

In Debate, regulation on June 15, 2009 at 9:35 am

Gordon Brown has announced proposals for an “independent statutory regulator” of parliament. The new regulator will oversee the actions of politicians in parliament and remove the self-regulatory arrangements which had overseen the expenses claims regime publicised in the Telegraph.

In his announcement he dismissed as “reminiscent of the last century (a system) where the members make up the rules and operate them among themselves”. However, in the new system, MPs may still have significant influence on the regulator – but is this such a bad thing?

1. Who owns the code of conduct?
Gordon Brown has said that the code of conduct for MPs will be drawn up after consultation with all political parties represented in the Commons. The code will be enshrined in statute, to give it the force of law and the regulator will be responsible for “applying firm and appropriate sanctions”.

Therefore, the contents of the code of conduct still remains under the discretion of MPs. This is important for democratic accountability. But what happens to the code after it has been agreed? It may be desirable, for example, for the independent regulator to have a formal role in proposing amendments to the code. And should parliamentarians have any say in the interpretation of the code? What about if elements of the code are found to be ambiguous (as all laws are)? How and where the distinction between self-regulation and statutory regulation is made will have an important bearing on whether the regulator is seen to be independent.

But the alternative is worse. If the code of conduct was imposed on MPs by the regulator, it could lead to significant problems. No one is better placed to understand the job of being an MP than MPs themselves and no one faces the anger of the people more than an MP who has acted inappropriately. A code which was written by an external regulator would be unlikely to command the respect of MPs, resulting in people following the letter rather than the spirit of the rules.

2. Who determines the sanctions?
The announcement by the prime minister seemed to suggest that MPs would determine the appropriate sanctions for people who break the code – another feature of self-regulation.

“It will codify much more clearly the different potential offences that must be addressed and the options available to sanction.”

It will be interesting to observe how wide ranging these sanctions are: whether they include criminal sanctions for example. But also whether the sanctions suggested by the regulator ever puts MPs in dispute with the regulator. This could damage the legitimacy of the whole process. Advocates of self-regulation say that the harshest penalty is facing an unfavourable finding in front of your peers. Many MPs have shuddered at the prospect of having to make a statement of apology in the House of Commons. But whilst a public apology may be sufficient for misuse of parliament stationery, is it appropriate for buying a duck house on expenses?

3. Who appoints the regulator?
Gordon Brown’s statement didn’t set out who would be responsible for appointing the regulator. In a system of self-regulation, the regulator is usually appointed by an independent appointments commission, with an overview of the whole system. Many regulators are appointed by the secretary of state (eg. the Environment Agency, the IPCC) whilst others are appointed by parliament (Ofqual) or the Privy Council (the GMC) to further safeguard their independence from politics.

It is important to get the right balance in the appointment of a regulator so that the regulated have confidence in their judgment and the public are reassured that the person can act independently.

Changing self-regulation to statutory regulation for MPs is made more complicated by the fact that they are in charge of the legislative process. But it also provides a useful case study to understand many of the challenges faced when reforming regulatory systems.

Independent statutory regulation is not inherently better than self-regulation and does not necessarily inspire greater confidence amongst the public. It is often the process of regulation as much as the regulatory structures which determine whether or not it commands respect.


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