The chancellor, Rachel Reeves, has told private equity bosses that she plans to shut down more regulators across the UK as she attempts to drive growth across Britain’s subdued economy.
Reeves – who in July claimed regulators were a “boot on the neck” of business – highlighted her recent decisions to sack the chair of the competitions watchdog, shut down the payments regulator, and “severely” constrain the Financial Ombudsman Service, which UK banks have long lobbied to curtail. However, she said there was “still more to do”.
“I want to take out more regulators; there’s still too many,” Reeves told investment firms gathered in London at the British Private Equity & Venture Capital Association (BVCA) summit on Wednesday.
The chancellor stopped short of saying which regulators were in the government’s crosshairs, but stressed that environmental regulations – once viewed as a “blocker of growth” – were being changed.
Reeves said the Department for Environment, Food and Rural Affairs (Defra), now led by former City minister, Emma Reynolds, after last week’s cabinet reshuffle, was focused on how to “facilitate growth rather than find reasons to say no to development, whether that is [though] Natural England, or the Environment Agency”. The chancellor said the department was now “moving in the right direction”.
Reeves’ appearance at the BVCA Summit comes as the government launches a charm offensive to try to keep businesses on side before a challenging autumn budget on 26 November. Rumours are swirling over a number of potential tax increases – including on banks, property and landlords’ rental income – which could help the chancellor plug a shortfall of up to £40bn in the public finances.
“We will make it easier to do business in Britain, ripping out those things that have been blocking growth and instead, backing the builders,” Reeves added.
The chancellor also said she had received positive feedback after deciding to “get rid of” the chair of the Competition and Markets Authority (CMA) Marcus Bokkerink in January. Former Amazon UK boss Doug Gurr was appointed in his place, on an interim basis.
That leadership shake-up, Reeves said, had led to a “massive step-change” that was welcomed by firms. “Previously businesses, all the time – especially in tech – had been raising concerns about the CMA. That has changed a lot.”
Reeves acknowledged there was more to do in the City, including with the Financial Conduct Authority (FCA). However, she threw her weight behind chief executive, Nikhil Rathi, who was approved for a second five-year term in April. “When I wrote to regulators and asked: ‘What can you do to drive growth?’ … Nikhil responded positively to that. And that’s why we reappointed him to carry on heading up FCA.”
In the meantime, Reeves said she was taking aim at the Financial Ombudsman Service, which settles complaints between consumers and businesses but has been accused by lenders of delaying and complicating the car finance scandal. “We’re severely constraining the Financial Ombudsman, which I think is very important: they are not a regulator, they’re supposed to be a resolver of complaints but their role has grown much too much.”
“The regulatory reforms are very welcomed, and I think, needed for business,” Reeves added.
