The Treasury has unveiled its plans to reform the regulatory system as it seeks to ensure that regulators and regulations support growth in the UK economy.

It stated that while other countries had continued to improve their regulatory systems, the UK had “fallen behind” amid overly complex regulations, uncertainty, and risk aversion.

The Chancellor, Rachel Reeves, met with regulators yesterday (17 March) to outline the action plan designed to cut red tape as part of the government’s Plan for Change.

In an update, the government revealed feedback from UK businesses that stated regulation can be too complex and duplicative, leading to stifled progress and innovation.

“Over the past few decades, an excess of poorly designed regulations has resulted in unnecessarily complex and burdensome requirements for businesses and investors,” the Treasury said.

“Even if all these regulations had been optimally designed, their sheer cumulative impact - and the associated increase in regulatory activity - has produced an additional layer of burden which adds to this complexity.”

To alleviate these issues, the government committed to cutting administrative costs for business by 25 per cent by the end of this parliament by establishing a baseline for the administrative costs of regulation, and delivering a regulation reform programme targeted at removing or streamlining administrative processes.

It will also simplify the regulatory structures by removing or consolidating regulators where it feels it makes sense to do so, including consolidating the Payment Systems Regulator into the Financial Conduct Authority (FCA), among other changes.

Additionally, the Treasury highlighted that businesses suffer from a lack of certainty and predictability from regulators and regulation, and that the UK’s regulatory approach had become too risk averse.

To address these concerns, the government will work with regulators to achieve greater clarity on their roles, approaches, and processes, and strengthen the model of accountability and formalising performance reviews respectively.

One announcement was that the Financial Ombudsman Service (FOS) will be assessed to understand whether it is delivering its role as a ‘simple, impartial dispute resolution service’ that quickly and effectively deals with complaints against financial services firms.

The Treasury also revealed it will be working with regulators to establish a ‘concierge service’ that looks to enhance the attractiveness of the UK as a destination for global financial services, by making it easier for firms to navigate the UK’s regulatory landscape and broader barriers to entry.

Other pledges include the FCA reducing regulatory reporting requirements for firms and proving a dedicated case officer to every firm within its regulatory sandbox.

“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,” commented Reeves.

“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.”

---