Environmental regulators will be subject to "growth duty", says Government

A new Deregulation Bill, announced this week as part of the Queen's Speech, will require all non-economic regulators to "have regard to the impact of their actions upon growth". If introduced, this new duty would apply more than 50 bodies including the Environment Agency, Natural England and the Drinking Water Inspectorate.

A consultation on the creation of a new 'growth duty' for regulators (24-page / 403KB PDF) by the Better Regulation Delivery Office (BRDO), part of the Department for Business, Innovation and Skills (BIS), closed last month. The Government is yet to provide a formal response to this consultation.

Environmental law expert Gordon McCreath of Pinsent Masons, the law firm behind Out-Law.com, said that the measure was "the latest instalment of an emerging theme in recent new legislation". However, it was not yet clear what the new duty would mean for regulators in practice, he said.

"Similar thinking has resulted in the inclusion in the Regulatory Reform (Scotland) Bill of a new proposed duty for Scottish regulators, including the Scottish Environment Protection Agency, of 'contributing to achieving sustainable economic growth insofar as not inconsistent with their functions'," he said.

"The problem here is: what does this mean? A lot of thinking has gone into what we mean by 'sustainable development', but this introduces a new element to be considered alongside it. In any case, whether it will have much effect in practice will depend on how the regulators act upon it. For both wordings, the duty will boil down to a duty to consider growth – but, for both, it will be a part of a balancing of factors in reaching the final decision. Where that balance is struck will be to a large degree at the discretion of the regulator," he said.

In its consultation, the BRDO cited a "strong body of evidence" suggesting that regulators were not "consistently achieving both protection and prosperity in the way they operate". "In practice, this means that they are not always seeing businesses as entities that they need to work with in a sustained manner and therefore not always having due regard to economic concerns in the course of regulating," the document said.

"For some regulators, supporting growth remains at best a secondary concern as it is not currently a statutory duty for them. Establishment, in statute, of a clear objective to have regard to growth would remove the uncertainty over whether regulators are able to take account of such considerations," it said.

As proposed by the consultation, the duty would "complement, rather than override" existing regulatory duties. It would not allow for "non-compliant or illegal economic activity that undermines markets to the detriment of consumers, the environment and legitimate businesses", the BRDO said.