Government reveals smarter regulations

15 May 2023

THE FIRST dynamic package of deregulatory reforms to grow the economy, cut costs for businesses and support consumers has been unveiled.

Taking advantage of post-Brexit freedoms, the Government will remove unnecessary red tape and regulatory burdens, ensuring rules and regulation for British businesses is proportionate and takes into consideration wider impacts on consumers, innovation and competition – as well as direct costs.

The package is the first of a series of deregulation announcements expected this year and is focused on delivering benefits to business. The reduced reporting requirements could save employers over £1 billion per year.

This will help to deliver on the Government’s priority to grow the economy and is a down payment on the UK’s ambition to have one of the most innovative and agile regulatory regimes in the world.

This package includes:

  • Reducing the business burden. We will reduce time-consuming and disproportionate reporting requirements for specific elements of the Working Time Regulations, while retaining the 48-hour week requirement and upholding our world leading employment standards. This could save employers around £1bn a year. We are also simplifying regulations that apply when a business transfers to a new owner.

  • Ensuring regulation is, by default, the last rather than first response of Government by reforming the Better Regulation Framework. The new, smarter framework will ensure future regulation of our changing economy is streamlined, minimises business burdens, and puts forward-looking regulation at the heart of Government decisions.

  • Improving regulators’ focus on economic growth by ensuring regulatory action is taken only when it is needed, and any action take is proportionate. Following Professor Dame Angela McLean’s review of the regulators’ Growth Duty, the government intends to consult on refreshed guidance on how regulators deliver their growth duties. The government will also consider the merits of commencing statutory reporting and how best to promote growth with utilities regulators, who are currently not in scope of the Growth Duty.

  • Promoting competition and productivity in the workplace by limiting the length of non-compete clauses to three months, providing more flexibility for up to 5 million UK workers to join a competitor or start up a rival business after they have left a position. The change will also provide a boost to the wider UK economy, supporting employers to grow their businesses and increase productivity by widening the talent pool and improving the quality of candidates they can hire.

  • Stimulating innovation, investment and growth by announcing two strategic policy statements to steer our regulators. We are today publishing the first of these statements for consultation, on energy policy, which will be followed soon after by the Government’s strategic steer to the Competition and Markets Authority (CMA).

Over the past few decades, we have seen a build-up of regulation in every aspect of our lives. Businesses have faced hundreds of new rules, costing time and money to read and comply with thousands of pages of regulations.

These rules make it more expensive and harder for startups to enter the market or to scale up and grow. They have reduced competition, raised prices and reduced innovation, leaving consumers worse off and UK firms less competitive in global markets.

Business and trade secretary, Kemi Badenoch said, "I have listened to the concerns of business of all sizes and have made it a priority to tackle the red tape that holds back UK firms, reduces their competitiveness in global markets and hampers their growth.

"We are taking back control of our laws after Brexit, reducing and improving regulation and giving businesses the freedom to do what they do best – sell innovative products, create jobs and grow the economy."

Tina McKenzie, policy chair of the Federation of Small Businesses (FSB) said, "For years and under all Governments, well-meaning Ministers have reached to create new regulations in response to issues. This is then repeated under the next set of Ministers - leaving us with a high cumulative burden for business to deal with.

"We are pleased to see a change of approach here, moving away from regulation as a first resort, alongside a reduction in administrative requirements that divert time away from running a business, and more of a focus for regulators on stimulating economic growth."

We’ve already taken advantage of our new status as a sovereign and independent nation. Among other things, we have set our own tariff regime via the UK Global Tariff to cut tariffs so we can reduce prices for UK consumers; we’ve introduced the UKCA marking to improve goods regulation and we will pass the Data Protection and Digital Information Bill to set a new, less burdensome approach than the GDPR.

Our Edinburgh Reforms of UK financial services include over 30 regulatory reforms to unlock investment and turbocharge growth in towns and cities across the UK.

Our Retained EU Law Bill, which is currently passing through parliament, will end the special status of retained EU law (REUL) by the end of 2023 ensuring that, for the first time in a generation, the UK’s statute book will not include reference to the supremacy of EU law or EU legal principles.

We have the unique opportunity to look again at these regulations and decide if they’re right for our economy, if we can scrap them, or if we can reform and improve them and help spur economic growth.

To ensure that Government can focus on delivering more reform of REUL, to a faster timetable, we are amending the REUL Bill to be clear which laws we intend to revoke at the end of this year. This will also provide certainty to business by making clear which regulations will be removed from our statute book.

We will retain the powers that allow us to continue to amend EU laws, so more complex regulation can still be revoked or reformed after proper assessment and consultation.

The reforms we are announcing today are not just for central Government, we will also provide a clear signal to our regulators that driving innovation, investment and growth should be at the heart of what our regulators do.