The cobra bounty remains one of history’s starkest examples of a policy that backfired – and of the hubris that too often accompanies power. During British colonial rule in Delhi, paternalistic authorities offered a reward for every dead cobra delivered. But many Delhiites, acting with perfect economic rationality, started breeding cobras instead. When officials cottoned on and scrapped the bounty, the breeders released their non-worthless – and very much venomous - stock. The result? More snakes than ever. The risk of such a perverse incentive – nesting unseen within ostensibly good policy – springs to mind whenever a new government policy is announced: the road to legislative hell is paved with good intentions, to paraphrase Bernard of Clairvaux.
Take the government’s new plan to simplify how stakeholders are consulted, set out in its recent paper on the simplification and agency of government (paper available here). The principle, we think, is sound, and we agree that the consultation system does need reform: sometimes there’s a feeling that consultations are released as a tick-box exercise when the outcome has already been decided, other times consultations can delay progress on important reforms. However, there’s a difference between streamlining processes and having effective consultation to achieve positive policy outcomes, and simply not checking whether doing something is a good idea. The concern with this government paper is the real possibility that the latter approach will be taken. We don’t think this would lead to positive policy outcomes.
There’s also a practical risk: removing consultations doesn’t remove opposition, it risks just moving it. Challenges that would previously have been aired at the front end of policy-making through consultation responses may instead emerge at the more expensive back end through judicial review proceedings.
What’s more, less transparent lobbying might also take the place of formal consultation, which risks gumming up the system in ways that are harder to scrutinise and resolve – and which is likely to be far less accountable to the public.
Tax
So far as it relates to tax and fiscal policy, the letter is more bluster and image projection than it is a serious engagement with a serious problem. There aren’t structural obstacles to making radical tax changes without consultation. Judicial review isn’t particularly a problem for tax policy (groups sometimes make challenges and almost always fail).
Good consultation will often look beyond narrow questions of whether draft legislation is easy to interpret and implement, and give respondents the space to provide their views on the potential repercussions of the proposed changes. A recent example is the consultation on reform of carried interest rules, where respondents raised a number of red flags about what the proposals might mean for the UK’s international competitiveness, and the proposals were consequently refined.
But if the government is trying to signal that it plans to do less consultation around tax reform then that would be a mistake in our view. Rushed tax changes don't simplify, they often add complexity. They miss loopholes and create problems nobody anticipated.
Further, the effectiveness of tax policy is measurable, and at a time where the public purse is being stretched across competing priorities and tax as a proportion of GDP is at an all-time-high, the government can’t afford to take decisions that will reduce tax receipts. There are lots of ways to try and gauge the behavioural response to tax changes, all of them imperfect, but one way is through consultation.
Employment
The Employment Rights Act illustrates the risk of not consulting before legislation is introduced.
The government's commitment to bringing an Employment Rights Bill before parliament within its first 100 days in office was ambitious, but the pace of delivery meant that some provisions were drafted without the benefit of full engagement with stakeholders. As a result, certain measures were immediately susceptible to criticism of being unworkable in practice or of having wider economic implications that had not been fully explored. In some cases, significant amendments ended up being conceded during the Bill's passage – for example, the proposals for day one unfair dismissal rights and for mandatory collective consultation whenever 20 or more redundancies were proposed across an entire organisation were both ultimately withdrawn. In other cases, provisions that might have benefited from further refinement made their way into the final Act. While the government is now consulting on much of the detailed secondary legislation, this can’t fully address issues in the primary legislation itself.
Employment law is inherently complex, and in our experience early and meaningful consultation is essential to identify the impact on different sectors, anticipate practical challenges and avoid unintended consequences.
Immigration
Immigration is an area where policy development and implementation can potentially happen swiftly, especially where primary legislation is not required and changes are implemented via Immigration Rules. It is also an area with high political exposure for government.
There are very narrow statutory duties to consult in this area, so we wouldn’t anticipate that the exercise to remove formal consultation and reporting requirements from primary legislation would produce a significant change of position.
However, a default approach in which ‘ministers reach decisions and proceed to act on them’ could result in policies being rolled out without adequate scrutiny of whether proposals are likely to fulfil their stated aims both in terms of policy logic and workability, especially where opposition is expected but a Minister is nevertheless determined to act. It may also lead to less transparency on who is being included in participatory policy making and in turn less (rather than more) public trust in government.
A recent example of where consultation has been a vital tool for shaping policy development is in relation to the proposed earned settlement policy. The initial policy proposals were produced in haste and needed significant development. The public consultation received over 200,000 responses. This level of response is likely to have taken the government by surprise (by way of contrast, a consultation on reforms to the right to work scheme received only 340 responses). Although this will have created an operational challenge for analysing the responses received, and therefore slowed down the progress of the policy, it has served to give the government an indication of the level of concern associated with the complex impacts the policy could produce, as well as a wealth of information on how to minimise the risks of unintended consequences. An area for further consideration would however be on consultation question design, as the question on transitional arrangements was confusingly drafted and the responses to some of the other questions could be interpreted in more than one way.
If the promised new general guidance and detailed guidance on approaches to public consultation significantly constrains public participation on immigration issues akin to earned settlement, a concern is that the government may overlook an important barometer of public feeling as well as proceeding with policies that are less developed than necessary to be fair, workable and to meet their intended objectives.
Bad policy
It is important that government policy is not reckless, rushed or ill-considered. It should be grounded in evidence about whether proposals will meet their own stated objectives. Policy should go beyond something designed for the front pages.
That said, there is plainly room for a more streamlined approach. Between 2019 and 2023, for example, the government asked the public three times for views on introducing legislation to microchip cats, including gathering views on the legal definition of a cat. Few would argue that the process could not be tightened. So we welcome the ambition of the government to be responsive and effective, but caution that speed without scrutiny isn't progress.
