The Chancellor has summoned regulators to Downing Street as it unveils plans to cut business red tape by a quarter in a drive to kickstart economic growth, including making remortgaging easier.
The Financial Conduct Authority, the Prudential Regulation Authority and the Civil Aviation Authority are among the bodies that have been called into a meeting this morning with Rachel Reeves as the government bids to cut both the number of UK watchdogs and the actions they take.
This meeting is expected to unveil a wide range of plans, including making it easier for customers to remortgage with a new lender, reviewing the £100 contactless payment cap, to paving the way for package deliveries by drones.
The Treasury says: “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 Financial Conduct Authority is expected to release proposals to simplify mortgage lending rules, including making it easier to re-mortgage with a new lender and reduce mortgage terms.
The Chancellor will also pledge to change the law to restrict merger investigations by the Competition and Markets Authority in two key areas, according to a report in the Financial Times.
Reeves wants to limit the watchdog’s “share of supply” test, which allows it to probe deals that would result in a company controlling 25% of the supply of goods and services in a market.
She also plans to peg back the regulator’s “material influence” test, which gives the body the power over purchases of certain interests in a business, such as significant shareholdings, even if they fall short of total control.
The Chancellor will also ask cabinet ministers to suggest which of the more than 130 regulators that could be abolished by this summer.
Last week the government abolished the Payment Systems Regulator and what it calls “the world’s biggest quango,” NHS England.
Reeves says: “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.”
UK Finance has published its own Plan for Growth today, which calls for “a pro-growth operating environment” that “unlocks financial services”.
Its chief executive David Postings says: “The current discussion about what more regulators could do to support growth and the very constructive way in which they have responded has created the space to consider further reforms.
“We need a careful but decisive move away from regulating for risk, and towards a more modern regulatory framework and internationally competitive environment.
“We have already seen the government and regulators announce action in line with our asks and I hope more of the ideas we have set out are taken forward to support growth and benefit consumers and businesses up and down the country.”
The Institute of Directors director of policy Roger Barker adds: “We would also like to see the government apply more rigorous and timely impact assessment procedures when considering new regulation.
“Non-regulatory solutions should always be considered, and the business case for new regulation should be subject to proper independent scrutiny by the [government’s independent] Regulatory Policy Committee.
“There should also be a commitment to reviewing the ongoing effectiveness of existing regulation at regular intervals.”
