London market cheers plans to reduce UK regulation
Government pledges to cut admin costs for businesses and clarify the jurisdictions of various regulatory agencies, makinf regulatory activity more predictable and approvals speedier
Government action plan aims to cut red tape and encourage innovation
The London insurance market has welcomed the government’s newly announced drive to streamline regulation in a bid to boost anaemic economic growth.
The action plan, published by HM Treasury today, promises to lessen oversight that “too often holds back growth and inhibits private sector investment”. The chancellor of the Exchequer, Rachel Reeves, is meeting regulators today as part of the initiative.
The Treasury has promised to reduce administrative costs 25% during the current parliamentary term, which ends in 2029 at the latest. The government also pledges to clarify the jurisdictions of various regulatory agencies, make regulatory activity more predictable and regulatory approvals speedier to encourage innovation and reduce public sector “risk-aversion”.
“Unnecessary regulation chokes competition and stifles business – that’s why we’re taking action to unleash industry right across the UK to go for growth,” Jonathan Reynolds, business and trade secretary, said.
In the financial sector, the government will set up “a concierge service” to help foreign businesses comply with UK regulatory standards. New rules will allow the Financial Conduct Authority (FCA) to assist start-ups and reduce the administrative burdens on them. The Treasury will review the financial regulators’ list of required considerations when making new rules “to rationalise them and ensure a focus on their priorities”.
Caroline Wagstaff, chief executive of the London Market Group, said the group had been pushing for the concierge office and more broadly for streamlined oversight. The action plan contains “strong responses to those asks and will be critical in helping London remain the global centre for risk transfer”, Wagstaff told Insurance Day.
“We are particularly pleased the Treasury sees a key role for industry in driving the accountability of regulators in delivering this change. We look forward to the rapid implementation of all of the proposals,” Wagstaff added.
Nafisah Hussain, senior public policy executive at the International Underwriting Association (IUA), told Insurance Day: “The vision outlined in the government’s policy paper to ensure regulators support growth chimes strongly with the IUA’s own policy views.”
Nafisah Hussain, International Underwriting Association
She added: “We agree regulation should encourage investment and innovation. This is particularly important in the London insurance market, which is international in nature and competes directly with other jurisdictions around the world.”
Christopher Croft, chief executive of the London & International Insurance Brokers’ Association, said the trade body backs “the government’s intent as it looks to streamline regulation to boost growth”.
But Croft expressed concern the government mistakenly associates innovation only with new companies. “Incumbent firms can be innovative too and deserve just as much support and encouragement. If the government is looking to create a two-tier system that favours start-ups that would not necessarily be progress,” he told Insurance Day.
“We agree regulation should encourage investment and innovation. This is particularly important in the London insurance market, which is international in nature and competes directly with other jurisdictions around the world”
Nafisah Hussain
International Underwriting Association
The Association of British Insurers (ABI) said the government’s plan was “a welcome intervention”. The ABI’s director-general, Hannah Gurga, said regulation “must be proportionate if it’s going to encourage the innovation, investment and growth our customers and economy need”.
Rain Newton-Smith, director-general of the Confederation of British Industry, said the plan “signals a shift towards a more proportionate, outcomes-based approach that should deliver more sustainable growth and investment”.
She added: “Smart, proportionate regulation could be the UK’s international calling card once more, bringing confidence and easing the burden on many sectors.”
The UK Labour government, which took office last July, has pushed regulatory liberalisation as a remedy for the country’s sluggish economy. GDP grew 0.1% in the last quarter of 2024 and 0% in the third quarter, according to the Office for National Statistics.
Last week, the main financial regulators announced they were abandoning plans to impose new diversity and equity regulations on the sector. The FCA and the other major regulator, the Prudential Regulation Authority (PRA), first announced these in a 2023 consultation.
“In light of the broad range of feedback received, expected legislative developments and to avoid additional burdens on firms at this time, the FCA and PRA have no plans to take the work further,” the agencies said.
The FCA has also abandoned plans to permit making uncompleted, ongoing investigations public if this was in the public interest. At present the FCA does not announce investigations or the identities of firms being investigated until some sort of regulatory action is taken.
