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Chancellor Rachel Reeves will this week step up pressure on Britain's regulators to tear up anti-growth rules, in the face of renewed criticism from business that the government is making things worse.
CBI chief Robert Soames said on Monday that businesses had been “hurt” by government policies and new employment regulations that would hamper growth and cause job losses.
Labour's election manifesto included promises to regulate a range of areas, from the workplace to football. The government's assessment of the impact on the workers' rights package estimates it will cost businesses £5 billion a year.
Downing Street insists there is no contradiction between its deregulation campaign and its determination to introduce new rules in certain sectors.
“It's a balance to strike on regulation,” No. 10 said, arguing that legislating for better workplace rights would help create a more productive workforce.
But a spokesman for Prime Minister Sir Keir Starmer added: “The government will take an unabashedly pro-growth approach. We will work with regulators to eliminate rules that unnecessarily hinder growth.
Reeves' allies say the chancellor will “enlist” some of Britain's top regulators to reinforce that message on Thursday, as she tries to prove she has an agenda to shake Britain out of its growth slumber.
Some business leaders are not convinced. Soames told the BBC that the government's workplace reforms to “make work tidy” would force companies to make workers redundant and create an “adventure playground for employment rights lawyers”.
“I think not only will they not hire, I think they will let people go,” he said. “I think there may be a very ugly rush before some of these things go into effect.”
Business groups accuse ministers of introducing a raft of red tape as the government bans exploitative zero-hours contracts, ends “fire and rehire” tactics, introduces basic rights from day one and protects workers from unfair dismissal.
Labour's manifesto also included “increased registration and reporting requirements” for companies, and pledged to introduce “binding regulations” on companies developing artificial intelligence.
Ministers are committing to “take decisive action to improve building safety, including through regulation”, in the wake of the Grenfell Tower fire.
The Starmer government is creating a new independent regulatory body to ensure the financial sustainability of football clubs. The Treasury said the new regulation of “buy now, pay later” companies will support growth in the sector and protect consumers.
Reeves He argues that while Labor will not shy away from necessary new rules, it believes regulators must look at the current rule book and adopt a completely new culture in relation to risk.
In it House palace speech In November, the adviser told regulators: “The UK was regulating risk, but it was not regulating growth.”
Starmer, Reeves and Jonathan Reynolds, the business secretary, wrote to 17 watchdogs on Christmas Eve asking them to outline pro-growth proposals. Thursday's meeting at the Treasury Department aims to assess progress.
The first tranche of regulators to walk through the door will include Ofwat, Ofcom, Ofgem, the Environment Agency, the Office of Rail and Road, along with the Competition and Markets Authority.
The CMA falls particularly in the Reeves and Starmer landmarks. “They are the people who often come up in conversations with business people,” said one of the Chancellor's allies.
The CMA on Monday published its annual plan, which used the word “growth” 111 times, as the regulator tried to show the government it was responding to the mandate.
The agency has taken pains to point out that this is not a new approach, stating in the plan that this is the “third year” it has pursued such a strategy.
The watchdog also announced that it had established a “Growth and Investment Council” comprising bodies including the Central Bank of Iraq and the British Chambers of Commerce “to help identify competition opportunities to unlock growth and investment.”
In October, Starmer told a room of about 200 senior executives that the government would “make sure that every regulator in this country, particularly the economics and competition regulators, takes growth as seriously as this room does.”
The focus stems in part from the CMA's handling of Microsoft's $75 billion acquisition of Activision Blizzard, which the agency eventually approved in 2023 after initially controversially blocking the deal.
These pressures come as the new competition regime for digital markets comes into full effect this month, which will affect large technology companies that are believed to have a significant influence in some digital activities.
Reeves' allies say she wants to work with watchdogs, including encouraging them to tackle an entrenched culture where ministers demand “more regulation every time something goes wrong”.
“Rachel wants them to turn around and say: 'This isn't our problem, it's a political problem – you have to solve it,'” one person said. “It wants a challenge from regulators.”
