Sir John Redwood is MP for Wokingham, and is a former Secretary of State for Wales.
This century has seen a great growth in the powers and reach of so called independent public-sector bodies. The four main parties in Parliament usually cheered on and engineered these moves; there was a general buy-in to the proposition that experts were better than political generalists, and that you needed to take the party politics out of large chunks of the public sector.
The new settlement was always flawed and never adhered to. Whilst the Opposition parties were usually hot to expose any ministerial interference in these bodies, they were also keen to blame the ministers when those same bodies got it wrong. They clung to the idea that experts are always right, even as the evidence mounted that they can also be wrong, or that bad experts that can do damage if unchecked by common sense and democratic accountability.
We have seen a long list of these bodies let people down, with hapless ministers then held to account for their failings.
The Bank of England, responsible for the single main task of keeping inflation to two per cent, presided over 11 per cent – and blamed external forces and someone else.
The nationalised Post Office imprisoned many of its honest and decent staff and plunged into heavy losses which taxpayers had to pay; its independent supervisor, UK Government Investments, looked the other way and left ministers to explain and put things right.
Ofwat, the water regulator, watched as companies failed to invest in more pipes and capacity, and left ministers to explain how we could clean up our rivers whilst keeping water bills to realistic levels. The Environment Agency allowed the Somerset levels to flood, damaging farms, before ministers stepped in to tell them to man the pumps and keep the ditches and rivers flowing.
All of these regulators and nationalised industries have a so-called sponsor department which is supposed to monitor and guide them: to know how much they will cost taxpayers, negotiate over money, charges, and performance going forward, and be a critical friend of the institution in government.
When I was a minister in such a department, I usually held an annual budget meeting with each of the important bodies to go through their need for public funds, their charging policy, their service quality, and their general efficiency. I would often hold a meeting before the publication of the annual report, to go over what they had achieved and to hear what their report would say.
Their leadership was responsible for how they managed the operation, for the outcomes, and for recommending the way to achieve the stated objectives laid down by government and Parliament. I was responsible for reporting to Parliament on their successes and failures – so I needed to know how they were doing.
In the case of a nationalised industry like the Post Office or Network Rail, there are today three supervisors in the mix: UK Government Investments, a sponsor department, and the Cabinet Office/Treasury complex. It would be better to establish in each case a single lead (and as it’s difficult to see what value UK Government Investments adds, why not wind it up altogether?).
It is strange that, when we see disasters unfolding at (nationalised) HS2, or presided over by the water or environmental regulators, the cry invariably goes up for more nationalisation, for even more independent regulation. There is no evidence that our main nationalised industries have performed well or are a model to follow – I will continue to make the case for more choice and private capital, and for people to pay for services they use.
Or take broadcasting: the large presence of the BBC, and the allied presence of Channel 4, as public sector broadcasters has marginalised the UK in the vastly expanding and fast-changing media world beyond our shores, dominated today by the US majors Comcast, Disney, Charter, Netflix, and Paramount.
The combined turnover of these big five US media conglomerates is $285bn compared to just $7bn for the BBC; the largest has a turnover 17 times the BBC.
Meanwhile global operations, through which ought to compete commercially, has a turnover of just $1.4bn. Worse still, the commercial company that manages them (tiny in comparison to the American success stories) is held back by public sector financing and regulatory constraints.
We could keep the licence fee (and national programmes people like domestically) whilst freeing BBC World to raise its own money and expand its service to compete more effectively with the modern media giants.
Whilst some people vote for more nationalisation, in day-to-day life they express a growing preferences for American, free-enterprise solutions: they buy more and more US entertainment, shop at Amazon, use Microsoft software, search with Google, talk to friends with Meta, and use Apple devices .
The UK and the rest of Europe is falling behind – in ways nationalisation and beefed up regulators cannot remedy.
The post John Redwood: Time and again, nationalisation and excess regulation hold Britain back – yet we demand more of it appeared first on Conservative Home.
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Author: Sir John Redwood MP
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