Out of shadows and into the fire

Industry regulators seem in the grip of a powerful suicidal tendency drawing them into the firing line. Literally so, in the case of Dame Helena Shovelton, lately chairman of the Lottery Commission.

What is it about this breed of agile committee room manipulators which has transformed them from faceless public servants into egregious public spectacles? Besides the Shovelton fiasco, we have recently witnessed the new head of the Independent Television Commission, Patricia Hodgson, criticised for her messy backstairs deal with ITV over the News at Ten; and Sir Christopher Bland, chairman of the BBC’s board of governors, humiliated by culture secretary Chris Smith (who would like to emasculate his regulatory powers). Add to this the inept stance of Food Standards Agency chairman Sir John Krebs over organic food and the Financial Services Agency’s toothless performance on endowment mortgages and we have a trend. Or, more accurately, a crisis in regulatory authority.

Businessmen tend to regard regulators as a tiresome necessity, whose principal purpose is to channel, assess and – hopefully – defuse consumer criticism directed against their interests. The regulator is therefore at its most useful when restoring dented public confidence by rooting out the “bad apples” (by definition a small minority) spoiling the pitch for everyone else. Conversely, it is at its most irksome when it starts insensitively meddling, allegedly on the consumer’s behalf, in matters on which it has little understanding. For this reason, self-regulatory organisations are much preferred to the statutory model. They have a reputation for being more light touch, even conciliatory, in their approach to business.

In fact, this is more a matter of perception than reality, as the Advertising Standards Authority’s robust stance against the likes of Nestlé and SmithKline Beecham clearly demonstrates. The indisputable advantage self-regulation does have over statutory regulation is that it is devoid of interference by politicians, peddling their own agenda. Fairly or otherwise, Hodgson is seen as something of a political plant at the ITC, a statutory regulator. And the whole News at Ten issue (including the Bland affair) is bedevilled with the suspicion that it more about politicians egos than what may be good for the viewing public.

The debate over regulation has assumed increased urgency because of the imminent White Paper on communication which, if it does nothing else, promises to rationalise the existing plethora of competing codes and practices into several super-regulators. As a result, existing regulators are frantically jockeying for position, in a sort of musical chairs where the prize is a place at the top regulatory table. An overhaul is certainly due and the establishment of an Ofcom (or something like it) looks superficially very attractive. It would help to draw together the tangled strands of an industry which has changed profoundly in the past few years – into something more complex, more fragmented and yet, paradoxically, more convergent.

But addressing the structure of regulation is only part of the solution. The other issue is respect which, as the events of the past few weeks show, is not that easy to earn these days. A regulator too close to industry interests can be portrayed as weak and toothless; a regulator robustly championing consumer interests may end up being pilloried as a political stooge. These days dissenting powerful interests are more likely to take a judgement to the courts than lying down, with painful results. As Dame Shovelton knows to her cost.

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