The government has announced a new action plan with 60 growth-boosting measures, including cutting the number of regulators, streamlining their core legal duties and cracking down on complexity in the regulatory system.
The Chancellor has pledged to "crack down on complexity in the UK regulatory system", promising to significantly cut the number of regulators by the end of the Parliament to reduce overlap.
The government says it will work closely with regulators to "ensure they are regulating for growth, not just risk". Cabinet Ministers will report back to the Chancellor in the summer with further suggestions for streamlining the regulatory landscape.
Regulators will be summoned for performance reviews twice a year from the relevant Secretary of State and will be judged against a set of targets agreed with the businesses they affect.
Following the decision to primarily consolidate the Payment Systems Regulator into the FCA, the Regulator for Community Interest Companies will be folded into Companies House to avoid duplicative disclosure requirements for companies which provide a benefit to their community.
Major regulators will also have their legal duties slimmed down, "so that they do not waste time satisfying redundant duties that do not align with their core purpose or the public’s priorities". This work will begin with the financial services regulators, energy watchdog Ofgem, water regulator Ofwat and the Office for Road and Rail.
The Treasury will also explore ways to streamline financial services regulators’ ‘have regards’ to improve predictability and business confidence. The role of the Financial Ombudsman Service will also be reviewed to ensure that it is acting as an impartial service that provides quick and predictable resolutions to disputes – not as a quasi-regulator.
The government also wants to attract more investment from international financial services firms by setting up a bespoke ‘concierge service’ to help them get to grips with UK regulations, making it easier to do business in the UK.
Business and Trade Secretary, Jonathan Reynolds, said: “Unnecessary regulation chokes competition and stifles business – that’s why we’re taking action to unleash industry right across the UK to go for growth.
“With a regulatory system that encourages innovation and economic growth combined with our Industrial Strategy, our Plan for Change can make the UK the best place to startup, invest and thrive.”
Rain Newton-Smith, CEO of the CBI, commented: “The UK’s Gordian knot of regulations hinders investment with compliance costs that are too high, leaving us trailing the international competition. Today’s announcement signals a shift towards a more proportionate, outcomes based approach that should deliver more sustainable growth and investment.
“Smart, proportionate regulation could be the UK’s international calling card once more, bringing confidence and easing the burden on many sectors.
“This announcement builds on the welcome commitment from the Prime Minister to reduce the thicket of regulation, and it is critical that this approach is reflected across the board including finding a landing zone for the Employment Rights Bill that supports growth, investment, and jobs.”
David Postings, chief executive of UK Finance, said: “We need a regulatory environment that supports investment and is internationally competitive. I’ve been delighted to see the progress already made by government and regulators, who are listening to the ideas put forward by UK Finance and industry and taking bold action. Today’s announcement builds on that progress, most notably reviewing how the Financial Ombudsman Service operates. It currently acts as a quasi-regulator, which was not the original intention, and addressing this issue is a key one for our sector. I look forward to continuing to work with the government to ensure financial services helps deliver growth up and down the country.”
Debbie Crosbie, CEO of Nationwide, added: “I welcome the government’s decisive action to deliver better regulation. Clear and predictable rules will help firms focus on growth and innovation for the benefit of consumers. The target to reduce the administrative cost of regulation by 25% could make a meaningful difference to the regulatory burden and economic growth.”
