The UK is in regulatory reduction mode. The Chancellor of the Exchequer, Rachel Reeve, is scheduled to meet with top regulators as she pursues a policy of slashing red tape. The goal is to “make Britain the best place to do business and drive economic growth.”
It is a truism that regulators are going to regulate and they tend to operate as a hammer looking for nail. Regulators need to justify their existence and they do so by creating new rules. But the cost of these rules are too frequently underestimated or overlooked and they can effectively become a hidden tax on the country.
The Chancellor is expected to propose an action plan that will save businesses “billions” as regulators are “axed” and “legal duties are streamlined.”
Apparently, following long negotiations, regulators have agreed to adopt “60 growth-boosting measures.” These include:
- Fast-tracking new medicines to market through a new pilot to provide parallel authorizations from key healthcare regulators so that patients can access the medicine they need quicker;
- Attracting 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;
- Paving the way for package deliveries by drone, as the Civil Aviation Authority permits at least two more large drone-flying trials in the coming months – which have already helped cut travel times for blood samples from 30 minutes down to 2 minutes between hospitals – and streamlines the regulatory process for manufacturing drones;
- Allowing families to manage their spending safely as the Financial Conduct Authority reviews contactless payment limits, including the £100 cap on individual payments, while speeding up queues at checkout.
- Support for homeownership as the Financial Conduct Authority simplifies mortgage lending rules, including making it easier to re-mortgage with a new lender and reduce mortgage terms.
- Helping start-ups secure funding to grow through the Financial Conduct Authority issuing more notices where they are likely to approve applications from budding entrepreneurs.
The world is changing, said the Chancellor, and their plan will kickstart economic growth.
“Today we are taking further action to free businesses from the shackles of regulation. By cutting red tape and creating a more effective system, we will boost investment, create jobs and put more money into working people’s pockets.”
Regulators are expected to have their responsibilities streamlined and the new system will support innovation as opposed to creating obstacles.
Lord Willetts will Chair the Regulatory Innovation Office (RIO), which will collaborate with businesses and regulators to “embed a pro-innovation regulatory system that enables ground-breaking new technologies to reach the market quicker.”
David Postings, Chief Executive of UK Finance, said they need a regulatory ecosystem that supports investment and one that is competitive globally.
“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.”