King’s Speech

Baroness Bi Excerpts

Thursday 14th May 2026 Lords Chamber

[Baroness Bi (Lab)]

My Lords, in following that speech, I will cover many of the areas covered by the noble Lord, Lord Johnson, but I welcome the focus on economic growth, trade and our partnership with the EU contained in the gracious Speech.

It is imperative that we take measures to improve our rate of growth to offer hope to the many people who feel that society no longer works for them. I am particularly concerned about the impact on young people, not just those who are not in employment, education or training but the many others who do everything right and then find that they cannot find a job that reflects their training and aspirations, and that they cannot buy a home or start a family. History is full of examples of revolutions started by disaffected young people who do not have a stake in the society in which they are living, and I am concerned about the impact on the future of our democracy if we are not able to grow the economy to meet their legitimate expectations.

We are all now hearing a clamour for bold change from my colleagues in the other place, and I join it to this extent: the broader geopolitical situation means that we need to choose whether to seek growth primarily through deregulation, as the United States has done, or through closer dynamic alignment with the European Union—our largest and nearest market. I accept that both routes have the potential to offer us higher growth than we are experiencing. However, as a cake enthusiast, I know that we cannot have the benefits of both while accepting the discipline of neither. The choice we make—whether to follow a US model or to be more closely aligned with the EU—has to run through all our decision-making on tax, regulation, skills, capital markets and energy costs.

Like my noble friend Lord Liddle, I urge the Government to choose alignment with the EU and hope that the British public have an opportunity to reverse Brexit in due course. We ultimately belong in the European Union not just because it makes economic sense but because we share the same values as our neighbours. We need to work together with them to enhance our joint defence capability, the importance of which my noble friend Lord Robertson so eloquently explained. In a world of large economic blocs, we are exposed. Although I applaud the Government’s progress on free trade agreements, the increase in growth that these FTAs are able to achieve does not make up for the loss of access to the single market and customs union.

I also accept, not least because of the manner in which we left, that the EU is understandably hesitant in responding to our overtures, but the review of the TCA due this year and the upcoming EU-UK summit provide an opportunity to make meaningful progress within the current framework to achieve business mobility, youth mobility, mutual recognition of professional qualifications and civil judicial co-operation, all of which will help to boost growth. Increasing growth depends on strengthening those sectors in which Britain is genuinely world class. I agree with the noble Lord, Lord Johnson, that financial and professional services are some of our world-beating industries. The sector generates jobs, tax revenues and exports, but it is overregulated, with compliance costs for just financial services exceeding £30 billion each year. I accept that regulation is necessary for growth, but it must be targeted and proportionate.

In the past, our approach to EU regulation was often to overcomply and gold-plate requirements. As we consider dynamic alignment in the future, I urge the Government to adopt the method advocated by Marie Kondo and consider keeping those regulations that spark joy and discarding those that we no longer need. As a lawyer—I declare my interest as the chair of a law firm—I hesitate to suggest fewer laws and thereby deprive my colleagues of the prospect of advising clients at attractive hourly rates, but too often new laws and regulations are issued in response to a failure or scandal, when existing legislation should simply be enforced. Solicitors, from sole practitioners to those in larger firms, are now contemplating the prospect of being regulated by the Financial Conduct Authority, which has no experience of overseeing professional services to date. This is for anti-money laundering, a role that has been performed thus far by the Solicitors Regulation Authority—one of 15 regulators and bodies whose requirements and guidelines we are currently required to observe in the UK.

I am bemused by the fact that, in London, we are deemed to need ever more regulation, overseen by growing numbers of regulators, whereas colleagues in New York, Paris and Frankfurt seem to get by perfectly adequately with a local Bar Association and compliance with the laws which apply to the rest of society.

I note that many noble Lords have discussed concerns about overregulation, but I am afraid my experience in the legal sector is replicated in many other areas of the economy. We need to be much bolder in deciding what regulatory oversight is actually needed to protect consumers, preserve stability and sustain confidence—with significant input from those sectors themselves, as they have a primary interest in maintaining their good reputation—and to remove the rest. We need proportionate regulation, alignment with the EU and support for our great industries, especially financial and professional services, to drive the growth that is needed for the next generation.