Smarter Regulation Programme

Thursday 16th May 2024 Written Statements

[The Secretary of State for Business and Trade (Kemi Badenoch)]

A year ago, the Government established the smarter regulation programme to focus on improving regulation across the UK economy to reduce burdens, push down the cost of living and drive economic growth.

Today, I am pleased to be able to update the House on our progress with the publication of two papers. First, “Smarter regulation: one year on—May 2024” which details our progress so far outlining important reforms and a road map for further reform. Secondly, our White Paper “Smarter regulation: delivering a regulatory environment for innovation, investment and growth” sets out an ambitious plan to improve the UK’s regulatory landscape and encourage innovation, investment and economic growth.

The UK’s regulatory landscape is recognised internationally as a model of best practice in many respects. There is, however, strong evidence which suggests that our regulatory culture hinders our ability to stimulate economic activity, foster innovation and attract investment.

Over decades, successive Governments have automatically defaulted to regulation as a preferred option, rather than a last resort. This has led to myriad complex and burdensome regulations which cost the economy an estimated £70 billion. Nearly half of all businesses tell us that regulation is an obstacle to growth.

My Department set up the smarter regulation programme to re-energise regulatory reform, capitalise on the benefits of Brexit, and promote growth in every corner of the economy.

Smarter regulation: one year on—May 2024

So far, it is estimated that our reforms will reduce the burden on business by up to £1 billion or 50 million hours per year by cutting unnecessary bureaucracy and form filling. The overall benefits to society are estimated at £6.3 billion.

Our reforms include making changes to the EU’s working time directive reporting requirements, and improvements to price transparency and product information for consumers.

“Smarter regulation—one year on” includes 25 new policy announcements across almost every sector of the economy to reduce burdens on business. This includes in those announced today:

a consultation containing proposals to deregulate the Commercial Agents Regulations, freeing businesses to negotiate contracts with one another without reference to outdated regulations that create legal ambiguity and confusion;

a consultation on proposals to abolish the legal framework for European Works Councils—mandatory committees multinationals had to consult if they employed people in the EU. The reforms could save business in the region of £5 million per year;

a consultation on new proposals on an alternative model for UK REACH, reducing the need for industry to access EU hazard data, improving data on ”use and exposure” and improving regulator powers, while ensuring high levels of protection of human health and the environment;

proposals to modernise the outdated and overly restrictive rules on gaming machines in a boost for bingo halls, casinos and arcades;

a consultation that builds on current covid easements to simplify how the sale of alcohol is licensed for consumption in pavement areas next to pubs and bars. This will support alfresco hospitality, including an option for providing takeaway and delivery sales by default; and,

an international vehicle standards vision which will set out the Government’s strategy for opening our markets to new vehicles, such as autonomous vehicles, to drive change and support innovation.

We will also consult on raising the corporate reporting threshold for medium-sized companies from 250 to 500 employees, which will reclassify 2,000 companies from large to medium-sized, and on exempting 41,000 to 43,000 medium-sized companies from producing a strategic report. This could save these companies around £150 million per year, offering a more proportionate set of requirements for SMEs, by cutting red tape and lowering their costs so that they can focus on delivering for their customers. Meanwhile, we are consulting on reforms to the complex Transfer of Undertakings (Protection of Employment) Regulations, which protect employees’ employment rights when the business or undertaking for which they work transfers to a new employer. These will save businesses time and money, while continuing to protect workers’ rights.

Smarter regulation: delivering a regulatory environment for innovation, investment and growth—White Paper

Today, I am also pleased to publish a White Paper which aims to deliver a paradigm shift in the UK regulatory landscape: our goal is to instil a culture of “world-class service” in how regulators and Government operate to deliver the best outcomes for businesses, consumers and society. We are clear this is not about reducing regulatory safeguards: we are rightly proud of the standards and protections our regulatory regime offers.

The reform package in the White Paper includes:

defining for the first time what constitutes a business regulator, and introducing a set of guiding principles of smarter regulation that we expect these regulators to apply in their day-to-day decision making;

a new “register of regulators”, as part of our ambition for a “one-stop-shop” of regulatory information so that anyone can find out which regulators and regulations apply to their business;

launching a new Regulators Council to improve the strategic dialogue between regulators and Government, and monitor the effectiveness of policy and strategic guidance issued;

a new share once support register which will mean vulnerable customers only need to register with energy, telecoms and water companies once, making sure they don’t drop off the register and are safe in the knowledge that their access to utilities is protected; and,

a new growth duty performance framework to enhance transparency and accountability, by asking regulators to provide evidence on how they are supporting economic growth.

This is about establishing a high bar for regulation and avoiding unnecessary costs for UK businesses but it is fully consistent with acting where that bar is met and where we need to protect consumers, businesses and the environment—for example the Government’s steps to increase regulatory scrutiny in the water sector.

Our focus is to ensure that we are the best regulated economy in the world with a well-functioning landscape of regulators. The reforms we outline today will give entrepreneurial businesses more opportunity to innovate, experiment, and capitalise on the UK’s global leadership in areas like clean energy technologies, life sciences, and digital services. They will help regulators to provide companies with the service support they need to innovate and attract investment, minimising burdens and supporting economic growth.

The White Paper has been laid in Parliament and a copy of the “Smarter regulation: one year on—May 2024” paper has been deposited in the Libraries of both Houses.

[HCWS468]