Challenges at the cutting edge

OECD Observer

Regulatory reform, like housework, is usually only noticed when left undone. However, the OECD recently gave the UK government a glowing report on its orderly house.*

According to the report, the UK’s economic turnaround of the last two decades is owed at least in part to its pioneering regulatory reforms, especially those changes that increased competition and strengthened the business sector. The result is today’s flexible labour market with unemployment that is among the lowest in the OECD, a world-class financial services sector, and investment flows that are among the highest in the world.

But some areas still need polishing. According to the OECD, privatisation of the railways went off track partially because of muddled regulation that impeded much-needed investment, and the automotive industry is still the source of considerable trade tensions.

Efforts continue

The Regulatory Reform Act of 2001, for example, addresses the lack of legislative capacity in the UK Parliament, seen as a barrier to changing inefficient laws on the books. Proposed reforms include modernising and simplifying procedures for renewal of business leases, or improving grants and loans arrangements for renewal of private sector housing. It also proposes relaxing the strict rules on closing time for pubs.

The UK has set the European standard for privatisation in the last two decades, particularly in opening up its electricity and gas sectors, and set the pace for reforming the telecoms sector. By privatising British Telecommunications (BT) in 1984, a number of new providers emerged, innovating the market place. But local access services are still dominated by BT. So, while Britain is a fast growing broadband market, it has taken time to get up to speed.

Competition reform has cured several of the market’s ills, but whether it can deal with the UK’s lagging productivity is another question. The 1998 Competition Act is already being supplemented by further reforms, principally to strengthen the institutions that apply the law and the sanctions for infringing it.

The OECD review team commends the government’s use of voluntary codes and agreements, though warns that the UK now faces more complex, “second-generation” issues with brand new challenges at the cutting edge.

*OECD (2002), UK Regulatory Reform, Challenges at the Cutting Edge, can be ordered online at or by using the order form. Visit

©OECD Observer No 235, December 2002

Economic data

GDP growth: +0.6% Q1 2019 year-on-year
Consumer price inflation: 2.3% May 2019 annual
Trade: +0.4% exp, -1.2% imp, Q1 2019
Unemployment: 5.2% July 2019
Last update: 8 July 2019

OECD Observer Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Subscribe now

<b>Subscribe now!</b>

To order your own paper editions,email

Online edition
Previous editions

Don't miss

  • MCM logo
  • The following communiqué and Chair’s statement were issued at the close of the OECD Council Meeting at Ministerial level, this year presided by the Slovak Republic.
  • Food production will suffer some of the most immediate and brutal effects of climate change, with some regions of the world suffering far more than others. Only through unhindered global trade can we ensure that high-quality, nutritious food reaches those who need it most, Angel Gurría, Secretary-General of the OECD, and José Graziano da Silva, Director-General of the United Nations Food and Agriculture Organization, write in their latest Project Syndicate article. Read the article here.
  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2019