Time is Money: How Regulators Can Support Growth (Industry and Regulators Committee Report)

Lord Willetts Excerpts

Tuesday 3rd November 2026 Grand Committee

[Lord Willetts (Con)]

My Lords, I congratulate the noble Baroness, Lady Hayter, on chairing the committee, which has produced this excellent report, giving a lot of practical advice on how we can ensure that the regulatory regime is improved. I declare an interest: I chair the Regulatory Innovation Office, in which capacity I gave evidence to the committee. Our task is to ensure that regulation does not stand in the way of desirable innovation and new technologies, and we operate under the scrutiny of the noble Baroness, Lady Lloyd of Effra.

I want to pick up on three points from the report. First, there is the growth duty, what it means and how one can promote growth. My view is that it is absolutely right to try to be as explicit as possible about the growth duty, and it is also then legitimate for Ministers, within that legal framework, to specify in letters and communications to regulators how they think the regulators can promote growth within their overall statutory responsibilities. All too often, under successive Governments, we have seen communications from government to regulators which are long lists of desirable things but do not give a sense of priority and are not sufficiently granular to provide action or “political cover”, as the noble Baroness called it, for officials in those regulators. So the more specific those guidelines and letters drawing on the growth duty are, the better. As an example, they should clearly focus on timeliness. Pace is indeed an issue, especially if you are a start-up. If you are trying to do something different and have limited resource or an impatient venture capital fund behind you, you need to get on with things, while the big, moneyed incumbents are much less focused on getting things done quickly. So dealing with things quickly helps new entrants. That is one area that can be looked at.

Regulators inevitably tend to focus on the “day job” and on what they are already familiar with. Getting them to think to about the innovative people coming in from the side who have thought of a different way of doing things and have the staff to engage with them is important. One thing we tried to do at RIO was shift the priorities in a regulator to ensure that innovative technologies coming over the horizon are properly understood and the companies delivering them are engaged with. That is another thing that is clearly pro-growth. There is then the frustration that companies have of concluding with one regulator to be told finally, “And now we’re passing you on to the next regulator”. The more that these processes can be simultaneous and parallel rather than sequential, the better.

Another area where RIO, working with Ministers, tries to make process is in convening groups of regulators to confront them as a group with some new technology, just to work out exactly who is responsible for what and how that can be communicated to innovative companies and the technology community. So there are practical things that can be done on growth.

The second point is on risk aversion. Speaking as a former Member of Parliament who used to face real constituents, I can understand the difficulties of standing in front of one’s voters and saying, “We’ve got this great idea: you’re going to take more risk”. It is not always a palatable message. My view is that we can make a lot of progress by looking at what we mean by risk. Often, the real problem is that the definition of risk is very narrow; it is what encompasses the specific responsibilities of the regulation, and it means that wider benefits are not taken into account. I shall give an example—which is not invidious and it is slightly simplified. There are lots of uses of drones. The CAA, with which we have a good, constructive dialogue, is worried about drones flying beyond line of sight and carrying heavy equipment, particularly electrical equipment, so its instinct is to say, “Our job is airspace and protecting airspace, and these types of drones are potentially risky”.

However, there are wider benefits. If the electrical equipment that the drone is carrying is a defibrillator—this issue was raised by the Welsh Ambulance Service—drones flying defibrillators to help people with heart attacks, which is what happens in Switzerland, is a good overall reduction in risk for British citizens. So we are not saying to British citizens, “You have to take more risks because we’re going to going to regulate drones more lightly”. We are actually saying, “When you’re looking at the risks of that bit of electrical equipment landing on someone because a drone crashes, also bear in mind the wider angle of it being used for a medical purpose”. Often, that wider perspective is not one in the minds of the regulators, but we can put it in the minds of the regulators. In other words, benefit aversion is the problem, not risk aversion.

My third and final point is that there is an important section of the report on the difficulties of overspecific regulation. We see that all the time. There is a great example in the report of the FSA requiring chilled foods to be chilled in storage, not allowing for the fact that the transport itself can be chilling now. There is an awful lot of that. The more we can have broad regulation and then use standards and trusted bodies such as the BSI, the better. Let us face it: this House is sometimes one of the worst culprits in adding detail to regulation. If one message that went out from our debate today to our colleagues was, “Lay off a bit”, that itself would be significant progress.