Reeves ramps up pressure on regulators in bid for growth
Chancellor Rachel Reeves and business secretary Jonathan Reynolds are set to meet with a group of watchdogs today as they kickstart plans to cut red tape from the economy and drive growth through regulation.
The chiefs of various regulatory agencies, including Competition and Markets Authority, Ofcom and Ofwat, have been summoned to Downing Street.
Officials from Ofgem, the Office of Rail and Road, the Environment Agency and the Civil Aviation Authority are also expected to attend the meeting.
In November, Reeves used her maiden Mansion House speech to argue financial regulation had “gone too far”, pledging to rip up the red tape that had attempted to “eliminate risk” but had “unintended consequences” in hampering growth.
“We cannot take the UK’s status as a global financial centre for granted,” she said in her speech. “In a highly competitive world we need to earn that status and we need to work to keep it.”
Today’s meeting comes after the Chancellor wrote to 17 regulators on Christmas eve asking them to lay out plans to drive growth. The summit is intended to check progress and assess their proposals.
In 2017, regulators became required to operate under a growth duty, where they must consider the “importance of the promotion of economic growth” but Reeves is hoping to push them even further.
For example, Reeves has said that the Treasury, the FCA and the PRA will shortly publish a review looking to scrap the Senior Managers and Certification Regime, which makes individuals in financial institutions more accountable for their conduct and competence.
Officials from the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority are expected to be in attendance at later meetings.
In a statement before meeting with the regulators, Reeves said: “Growth is the number one mission of this government so we can put more money in people’s pockets and help fund our public services.
“The economic headwinds we face show the importance of pressing ahead with our programme of reform to kickstart economic growth.”
However, the move has led some veterans of the 2008 financial crisis to warn that a rollback in regulations could lead to watchdogs becoming too relaxed on the risks facing the financial world.
“The world looks incredibly risky right now,” former Bank of England technical head of division David Aikman, told Bloomberg.
“It’s not an implausible statement to say that there’s far greater risk now than we understood there to be in the years after the financial crisis.”