Radical action plan to cut red tape and kickstart growth
The Chancellor will meet top regulator bosses in Downing Street today (Monday 17 March) as she unveils an action plan to deliver on the pledge to cut the administrative cost of regulation on business by a quarter, make Britain the best place to do business and drive economic growth.
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Chancellor meets regulators in Downing Street as she unveils action plan to cut red tape as part of Plan for Change to kickstart economic growth.
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Radical shake up will boost infrastructure building by simplifying guidance to protect bat habitats that blocks vital new homes and infrastructure.
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Business to save billions as more regulators are axed and core legal duties are streamlined.
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Action plan comes alongside 60 growth-boosting measures from watchdogs designed to make it easier to do business in the UK and delivers on the Prime Minister’s pledge to cut administration costs for businesses by a quarter.
The radical shake up will cut costly red tape that fails to deliver for local communities, such as hundreds of pages of guidance on protecting bat habitats – which goes far beyond legal requirements, needlessly costs businesses money and slows down planning decisions for major infrastructure projects.
A streamlined process for environmental regulations will also be put in place for major projects. This could include Lower Thames Crossing, subject to planning approval, as well as future schemes like Heathrow expansion. The new system will require just one point of contact and will end the merry-go-round of developers seeking planning approvals from multiple authorities who often disagree with each other.
This Action Plan will save businesses across the country billions of pounds by cutting the number of regulators, streamlining their core legal duties and cracking down on complexity in the regulatory system.
The Plan comes after the Prime Minister set out his vision for a more lean and agile state in a speech last week, abolishing the world’s biggest quango - NHS England - to scrap duplication and give more power and tools to local leaders so they can better deliver for their communities. The Prime Minister and Chancellor are clear that regulators must work for the people of Britain, not get in the way of progress.
Following weeks of intense negotiations, watchdogs have signed up to 60 growth boosting measures – including:
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Fast-tracking new medicines to market through a new pilot to provide parallel authorisations from key healthcare regulators, so that patients can access the medicine they need quicker;
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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;
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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;
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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.
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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.
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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 government will continue to 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 and better regulation will be a key part of the upcoming Modern Industrial Strategy.
Chancellor of the Exchequer Rachel Reeves said:
“The world is changing and that’s why we must go further and faster to deliver on our Plan for Change to 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.”
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.”
Further pro-business measures announced today include cutting red tape that blocks new housing and infrastructure.
It should not be the case that to convert a garage or outbuilding you need to wade through hundreds of pages of guidance on bats. Environmental guidance, including on protecting bats, will be looked at afresh. Natural England has agreed to review and update their advice to Local Planning Authorities on bats to ensure there is clear, proportionate and accessible advice available.
We will make it simpler and faster for projects to agree environmental permits, in some case removing them altogether for low-risk and temporary projects, putting an end to delays that can slow down decisions needed to get spades in the ground. Combined with the appointment of a single lead environmental regulator, this will speed up approvals and save businesses millions in time and resource. The government will also consult on allowing regulators to be more agile in making sensible decisions on which low-risk activities should be exempt from environmental permits. This will allow them to focus on high-impact, high-priority areas, such as low-carbon infrastructure - while ensuring nature protections are not weakened.
These come alongside action to crack down on complexity in the UK regulatory system, with the Chancellor promising to significantly cut the number of regulators by the end of the Parliament to reduce overlap.
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, which could how quickly they make decision on planning applications and new licenses for businesses and products. The regulators will immediately begin discussing these targets with businesses and publish them by June.
Following the decision to primarily consolidate the Payment Systems Regulator into the Financial Conduct Authority, 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. Cabinet ministers will report back to the Chancellor by the summer with further suggestions to cut numbers and create a more effective system.
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 new system will also support businesses to innovate instead of putting obstacles in the way, led by Lord Willetts as Chair of the Regulatory Innovation Office (RIO). The RIO works with businesses and regulators to embed a pro-innovation regulatory system that enables ground-breaking new technologies to reach the market quicker.
The RIO is focused on ensuring regulation supports transformative applications of emerging technologies, for example using AI to improve the efficiency and accuracy of radiology reporting, and the use of engineering biology by world leading UK companies developing innovative foods like lab grown meats.
Stakeholder quotes:
Rain Newton-Smith, CEO of the CBI, said:
“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.”
Irene Graham OBE, CEO of the ScaleUp Institute, said:
“It is excellent to see the Government turning its Plan for Change into real practical action.
“Scaling businesses have long cited infrastructure constraints and regulatory hurdles as hampering their growth. The practical initiatives set out in this Action Plan on planning reforms, the fast tracking, simplifying and streamlining of regulatory approvals and processes, and the emergence of concierge services should collectively have a significant impact in propelling the growth of these innovative firms forward across every sector and local economy.
“We look forward to continuing to work with the government on the next steps of this pro-growth regulatory agenda.”
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, said:
“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.”
Craig Beaumont, Executive Director of the Federation of Small Businesses, said:
“Today’s announcement shows the Chancellor is willing to put in the hard yards to let businesses do what they do best. Business owners are not bureaucrats. The delays, time wasting and sheer stress from having to handle layers of poorly designed regulation makes it harder and harder for small businesses to grow, generate jobs and provide for their customers.
“Every month a project might be delayed makes it harder to go ahead, and every second wasted on unnecessary forms is time away from business, staff and family. We have made clear recommendations to CEOs of the regulators visiting No.10 today, to transform regulation so they help, not hinder, small business growth and investment. This is a necessary pre-condition for increasing living standards, building a stronger economy and creating new jobs.”
Shevaun Haviland, Director General of the British Chambers of Commerce, said:
“This is an eye-catching package of measures which has a real potential to speed up decision-making and give businesses more certainty.
“Changes that would fast-track major infrastructure projects, such as the Lower Thames Crossing and Heathrow expansion, are especially welcome.
“Over half of firms tell us they are planning to raise prices, and with fresh uncertainty around tariffs, a 25 percent cut in the cost of regulation would be very welcome.”
Notes to editors
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The Action Plan can be found here. This sets out the strategic vision and actions that will be taken to create a regulatory system that drives growth while continuing to protect millions of people.
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Regulators in attendance at the meeting:
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Financial Conduct Authority
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Prudential Regulation Authority
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Environment Agency
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Natural England
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Medicines and Healthcare products Regulatory Agency
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Health and Safety Executive
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Information Commissioner’s Office
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The Regulatory Innovation Office