Regulators (Growth Objective)

Luke Murphy Excerpts

1st reading
Tuesday 25th March 2025 Commons Chamber

[Luke Murphy (Basingstoke) (Lab)]

I beg to move,

That leave be given to bring in a Bill to provide for the inclusion of economic growth as an objective for certain statutory regulators; and for connected purposes.

For too long, our regulatory system has been tangled, inefficient and disconnected from the mission of economic growth and prosperity. Instead of fostering investment, encouraging innovation and delivering good jobs, regulation has too often acted as a brake on progress: too slow, too risk-averse and too unpredictable. The previous Government hid behind regulators, deferring decisions, creating unnecessary bureaucracy and allowing inefficiencies to flourish. Too many businesses today face an overlapping, complex regulatory environment, with too many regulators, too many conflicting duties and too little co-ordination. It is a system that frustrates ambition and slows down investment.

This Government are determined to change that. Under the leadership of the Prime Minister, the Chancellor, and the Business Secretary, the Government are committed to smarter regulation: regulation that is pro-growth, pro-innovation and—yes—pro-worker. We recognise that regulation, when designed and implemented well, is not an obstacle but a tool. It is a tool to unlock private investment, tackle systemic risks, protect the environment, and deliver better outcomes for people and communities.

Britain’s businesses, large and small, are ready to drive economic growth, but they can only do so if the regulatory system enables them. There are now more than 100 regulatory bodies, many with overlapping mandates and responsibilities. The 17 key regulators the Prime Minister wrote to in December collectively employ 36,000 staff and spend £5.4 billion a year. That is a significant national investment, but one that too often lacks strategic co-ordination. Instead of working together, many regulators operate in silos duplicating work, slowing decisions, and creating unnecessary costs and confusion for businesses. Their powers and duties have expanded over time, without any overarching framework to keep them aligned. The result is a fragmented, sometimes contradictory system that no longer serves our national economic interest.

A clear example is the Payment Systems Regulator. Firms operating payment systems like Mastercard or Faster Payments were forced to engage with three different regulators just to function in the UK. That meant three sets of rules, three sets of processes and three sets of conversations to deliver just one service. For major firms, it was frustrating. For small or scaling businesses, it was a serious obstacle. That is why the Prime Minister announced its abolition, with its core responsibilities to be folded into the Financial Conduct Authority. This is not about deregulation for deregulation’s sake. It is about smart simplification: removing duplication, reducing cost and creating clearer points of accountability. In short, it is about regulating for growth.

But let us be clear: one example is not enough. The problem is systemic. The entire regulatory landscape needs to be reviewed, streamlined and refocused around a shared mission of economic growth. That is what the Regulators (Growth Objective) Bill would deliver. The Bill would support the Government’s broader regulating for growth agenda. The Chancellor and the Business Secretary have now published a radical new action plan, backed by businesses, to create a more agile, investment-friendly regulatory environment. As part of that work, the Chancellor secured 60 pledges from regulators that will deliver real, tangible change within the next 12 months. The CBI rightly called it:

“a shift towards more proportionate, outcomes-based regulation.”

This is practical, pro-growth reform: delivering for businesses, supported by businesses. But we must be clear that regulation can be both pro-growth and pro our other priorities, too. Balanced, purposeful regulation can support growth, and support the environment, strengthen public trust and raise living standards.

Take the Government’s new deal for working people. Opposition Members claim that our proposals—to raise the minimum wage and end exploitative zero-hours contracts, introduce day-one rights against unfair dismissal, and expand access to sick pay and parental leave—are somehow misaligned with the Government’s wider approach to regulation. But they fail to recognise that for too long, the UK has operated with a labour market divided between secure, well-paid jobs and a growing share of insecure, low-paid work. The result is a low-wage, low-productivity doom loop. Our new deal for working people is regulation with a purpose, making work more secure, businesses more productive and the economy stronger. These policies are not just good for workers; they are good for business, too.

The Government are not tearing up the regulatory rulebook, but rewriting it for a new era. We can and must learn lessons from home and abroad. Take Japan’s Top Runner programme, a pioneering regulatory approach that sets energy efficiency standards based on the best-performing products on the market, pushing industries to innovate and improve. By combining ambitious targets with industrial flexibility, it has successfully driven technological advancement and economic growth, while also reducing energy consumption. Or take the push by UK financial regulators to require major banks to open up their customer data, with consent, to third parties. That has helped to create a globally leading fintech ecosystem, with investment in UK fintech soaring. The Bill would force us to ask: “How we can repeat those successes in other sectors?” For too long, regulators have been left without that kind of strategic guidance, forced to make politically sensitive decisions in a vacuum. That is not fair on them, and it is not good for the country.

The Bill gives regulators the direction they have been missing. It does not ask them to stop doing their work; it asks them to do it better, together, and with a shared focus on creating prosperity. Because when regulation drifts, so does the economy. Yet right now, there is no formal mechanism to align regulators with the Government’s growth strategy. The Bill would provide it. It enshrines one simple principle: regulators must not only regulate for risk, they must regulate for growth. That means: every regulator must consider the impact of their decisions on investment, innovation and prosperity; and regulators must work together, ending duplication and aligning around shared national priorities. Growth would become a statutory objective, not an afterthought.

This is not theory; it is delivery. Regulation is not confined to the corridors of Whitehall. Its effects are felt in constituencies across our nation. The Bill is a call to action for the Government to bring forward a full review of regulators’ duties and objectives, with the ambition of creating a simpler, smarter framework fit for the modern economy. Too many of our regulators are operating under a patchwork of outdated or overlapping mandates. The result is duplication, drift and decisions that lack co-ordination or clarity. It is confusing for businesses, inefficient for regulators, and a barrier to growth. That is why today I urge the Government to go further and begin the work of legislating for a core set of statutory duties, including growth, across the regulatory landscape: duties that promote long-term growth and investment, protect consumers and the environment, and embed a culture of speed, clarity and accountability in decision making; and a system where regulators remain independent, but the expectations placed on them are consistent, transparent and aligned with our national priorities.

We will continue to protect what matters: safety, fairness, the environment and public trust. However, we must also deliver on what moves us forward towards innovation, economic renewal and growth. Growth is not a luxury—it is how we raise living standards, improve public services and restore pride in every part of this country.

Let us give regulators a clear foundation. Let us bring forward a new legislative framework that reflects the ambitions of a dynamic, pro-growth Britain. Let us regulate for growth. I commend the Bill to the House.

  Question put and agreed to.

Ordered,

That Luke Murphy, Mr Luke Charters, Uma Kumaran, Lola McEvoy, Chris Curtis, Sonia Kumar, Gregor Poynton, Kanishka Narayan, Mike Reader, Ms Polly Billington, Rachel Blake and Anneliese Midgley present the Bill.

Luke Murphy accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 4 July, and to be printed (Bill 207).