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Whose risk is it?


An independent advisor on regulation has called for United Kingdom government ministers and senior civil servants to be given "high quality training in risk management".

What a wonderful and sensible idea.

The recommendation was one of many contained in a report issued last month by the Better Regulation Commission, which advises the government on reducing the regulatory burden. The BRC said that the public attitude to risk in the United Kingdom was becoming defensive and disproportionate, and that this attitude was leading to "regulatory overkill".

This common sense report will be music to the ears of many risk managers and insurers in the United Kingdom and beyond.

The report "Risk, Responsibility and Regulation—Whose Risk is it anyway?" suggests that government should not be quick to regulate, rather it should do more to encourage "self-reliance". The BRC would like to see individuals take more responsibility for risk, using state regulation as a last resort and only when nothing else will work.

What degree we take responsibility for the identification and management of risk in our own lives is an important, but emotive, debate. When the government acts to save lives by making the wearing of seat belts compulsory, or by taking drink drivers off the roads, many of us complain, but eventually see that action is needed when people fail to take responsibility. But how many of us complain about our rights and the over intrusion of law makers when the government proposes to cut speed limits to reduce road deaths?

In its report the BRC notes a number of incidences in which the public and government response to a risk have raised questions. One example was the U.K. response to Sudan 1, a banned food coloring believed to have carcinogenic properties. Its discovery in Worcester Sauce, produced by Premier Foods P.L.C., sparked one of the biggest product recalls in history. However, the risks associated with Sudan 1 at low levels are negligible, according to the report. And other countries made far less of the scare.

The report states: "The relationship between risk, responsibility and regulation is rapidly emerging as an important theme of policy development. In it lies great opportunity, not only to reduce dramatically the burdens of regulation on society but also to reinforce national qualities of self-reliance, resilience and a spirit of adventure. But there is also a danger that if the relationship is unbalanced, we slip into a cycle of increased regulation to meet the demands of increased risk aversion."

Wise words, but will the BRC report lead to action?

Well, the outlook is good. When the BRC challenged the government in its 2005 "Less is More" report, the response was encouraging. The government is driving a big cut in the regulatory burden on U.K. companies with the Health & Safety Executive already publishing its simplification plans.

And one of the key recommendations of the report, the creation of the Fast Assessment of Regulatory Options Panel, is easily achievable. The impartial body will be charged with proposing an appropriate response to incidents such as food scares, transport accidents, crime and genetically-modified crops.

Let us hope that this laudable initiative does not wind up as just another layer of bureaucracy that will further complicate the process and add more cost. And, let us hope that this U.K. initiative can be exported to other countries in European such as Germany where risk managers are increasingly frustrated with the over-zealous application of well-intended EU rules by local civil servants.