There is a contradiction at the heart of Labour. Since July’s election, the government has set up a quango a week, prompting fears in business circles that extra red tape will further dampen the economy. Ministers have ordered about 70 reviews and consultations in the government’s first five months in office. Statist and interventionist. Very Old Labour.
And yet. What is Rachel Reeves up to over at the Treasury? The chancellor wears a red rosette, but her conviction that the dead hand of the state is stifling growth is straight from the neoliberal playbook. Just last week, she summoned a phalanx of industry regulators to lecture them on the need to ‘tear down the barriers’.
Legal watchdogs appear to have received a pass. The SRA confirmed to me that it has received no such entreaty or summons. That is just as well, perhaps. Independent regulation is supposedly critical to ensuring legal services serve the public interest and support the rule of law.
A ministerial diktat would be superfluous anyway. The booming commercial legal sector is more than doing its bit for UK plc.
Herein lies another contradiction, however. As the Guardian’s Nils Pratley noted last week, ‘firm and predictable regulation, coupled with the rule of law, is good for attracting investment’. Investors want integrity and certainty. They really don’t want a wild west.
The same goes for the courts. A robust and independent judiciary gives clients the confidence to resolve disputes and underlines the (highly profitable) primacy of English law. All those lucrative foreign litigants know they will get a fair hearing.
Reeves clearly thinks those pesky judges could do better, though. This week the Treasury took the highly irregular step of intervening in a Supreme Court case, seeking to protect car loan providers from multi-billion-pound payouts in a pivotal mis-selling case.
We wrote last week how the business lobby is working hard to force the class action bandwagon off the road. The government seems to be listening. Reeves is understood to believe the huge potential payouts would ‘damage the country’s pro-business reputation’. On its face at least, her intervention appears intended to pile pressure on the judiciary to align with the executive’s definition of the ‘national interest’.
That’s another political playbook. And a very familiar one.
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