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Rachel Reeves tells regulators there is ‘too much bureaucracy’ UK regulators to face twice-yearly reviews as Reeves says there’s ‘too much bureaucracy’
(about 5 hours later)
Chancellor tells UK watchdogs she wants to cut down on overlapping regulation Chancellor tells financial, environmental and health watchdogs she wants to cut down on overlapping regulation
There is “too much bureaucracy” that is making it “too slow to get things done” across the UK, Rachel Reeves has told regulators after summoning them to Downing Street. Regulators will face twice-yearly performance reviews from ministers, aimed at forcing them to be more growth-friendly, as the chancellor warned that “too much bureaucracy” is holding back the economy.
As the government continues its war on red tape, the chancellor told the bosses of UK watchdogs on Monday morning that she wanted to reduce duplication by regulators. Rachel Reeves met financial, environmental and health regulators in Downing Street on Monday and urged them to continue to streamline their approach, to make it more pro-business.
Only last week, Keir Starmer announced that NHS England, an administrative body described as the world’s largest quango, would be scrapped as part of efforts to cut costs and boost economic growth. “There are a number of things over the last decade or so that have held back growth, and one of them – if we are honest and you know better than anyone – is the regulatory landscape,” said Reeves. “Too much overlapping regulation, too much bureaucracy, too slow to get things done.”
The chancellor’s meeting with regulatory bosses is expected to result in further details on how the government will cut the cost of regulation by a quarter, as well as the slimming down or abolition of more regulators. Treasury officials said regulators would now be asked to submit “key performance indicators” by June, and would then be hauled in for twice-yearly appraisal meetings with the relevant secretary of state to assess their progress.
Speaking as the meeting began on Monday morning, Reeves said: “You know that the number-one mission of this government is to grow the economy. There are a number of things over the last decade or so that have held back growth, and one of them – if we are honest and you know better than anyone – is the regulatory landscape. As Reeves battles to kickstart growth after a string of disappointing economic data, the chancellor may also legislate to allow the competition watchdog to scrutinise fewer mergers.
“Too much overlapping regulation, too much bureaucracy, too slow to get things done: it is something that myself and other ministers hear all the time.” The Competition and Markets Authority (CMA), whose chair the government forced out in January, is considering changing the threshold at which it would intervene in proposed takeovers.
Reeves said she appreciated regulators’ suggestions to cut red tape, adding they would discuss “cross-cutting work that we could be doing across government to reduce some of the duplication”. This could mean increasing the market share that the merged companies would need to have to trigger CMA involvement from a current level of 25%.
As well as abolishing NHS England, the government has already announced plans to fold the Payments Systems Regulator into the Financial Conduct Authority, and Reeves is likely to scrap more regulators over the course of the parliament. George Dibb, associate director for economic policy at the IPPR thinktank, said: “Nobody’s disputing that we need companies to come and invest in the UK, and the way the CMA works is part of that. Where I think reforms are risky is if they start to affect the CMA’s ability to maintain competition in the economy.”
A third quango, the Regulator of Community Interest Companies, is expected to be folded into Companies House – and ministers will be instructed to report back to the chancellor by the summer with further suggestions for bodies that could be culled. A spokesperson for the watchdog said: “The CMA continues to work closely with government to ensure the UK merger control regime is effective and proportionate.”
Reeves is expected to unveil 60 measures UK regulators have agreed to take in order to boost economic growth after Monday’s meeting. Speaking after her gathering with regulators on Monday, Reeves said she was pleased with the progress that City regulators the Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA) have made in shifting the focus towards growth.
These include fast-tracking new medicines, reviewing the £100 limit on contactless payments, simplifying mortgage rules and holding two drone-flying trials to pave the way for drone delivery services. At her Mansion House speech in November, the chancellor suggested City regulation had gone too far after the 2008 global financial crisis and was stifling risk.
The measures follow a demand from the prime minister at the end of last year that regulators come up with “concrete proposals” to boost growth as the government attempts to turn around Britain’s struggling economy. The government also said last week it would abolish another financial watchdog, the Payments Systems Regulator, folding it into the FCA.
As well as culling regulators, Labour is committed to reducing the number of arms-length bodies that implement government decisions, in an attempt to cut costs and improve accountability.
As well as big business, conservationists who want to rewild their land are also likely to benefit from the government’s drive to cut regulations.
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Although the UK avoided a recession in the second half of 2024, the economy continues to falter. Figures released last week showed a 0.1% fall in GDP in January. Reeves and the environment secretary, Steve Reed, will remove the need for trusted partners – conservationists who have been working on nature schemes for some time – to apply to Natural England or the Environment Agency for permission to restore nature.
Other measures expected to be announced on Monday include: At the moment, conservationists who want to restore rivers or dig wetland areas have to apply to multiple regulators for approval, in what can be a time-consuming and costly process.
Reviewing environmental guidance given to planning authorities on protecting bats. The Department for Environment Food and Rural Affairs (Defra) said the new plan will allow trusted nature conservation and environmental partners “to move fast on restoring nature without applying to multiple regulators for permissions”.
Simplifying the process for agreeing environmental permits, with just one agency in charge of the system and permits being scrapped for low-risk or temporary projects. Jake Fiennes, director of conservation at the Holkham estate in north Norfolk said the current system makes it far too difficult to restore the rare chalk stream running through the national nature reserve, or to dig wetland areas for the many endangered wading birds which call the estate their home.
Slimming down the legal duties of financial services regulators, Ofgem, Ofwat and the Office for Road and Rail. He said: “The flood risk activity permits are currently a disaster. Those of us helping deliver the government’s environmental targets are regulated to death while those committing freshwater ecocide do so with near impunity. It’s an opt-in policing system that penalises compliance and desperately needs reform.”
Reviewing the role of the Financial Ombudsman Service. A Natural England source agreed that the system needed reform “The present regulations slow down good things as well as potentially harmful things. The fact is that our regulatory frameworks were designed to stop bad stuff happening (very important), but now we need approaches that are more about encouraging good things.”
Reviewing environmental guidance given to planning authorities on protecting bats.
Simplifying the process for agreeing environmental permits, with just one agency in charge of the system and permits being scrapped for low-risk or temporary projects.
Slimming down the legal duties of financial services regulators, Ofgem, Ofwat and the Office for Road and Rail.
Reviewing the role of the Financial Ombudsman Service.
Some of the changes, particularly those relating to environmental regulation, are expected to speed up delivery of significant infrastructure projects such as the long-delayed Lower Thames Crossing and the prospective third runway at Heathrow.