Ministers are set to receive new statutory powers to steer the UK's regulatory growth agenda, according to the King's Speech. The Regulating for Growth Bill, a cross-sector piece of legislation, aims to enhance the regulatory system's ability to foster economic growth.
Statutory Mandate for Regulators
The government’s report criticizes the current regulatory system for its lack of agility and responsiveness to innovation and change, which it says undermines the UK’s competitive edge. The bill will impose a clear statutory mandate on a list of leading regulators—including Natural England, the Environment Agency, and the Health and Safety Executive—to prioritize growth without compromising their core functions. This will be supported by a new statutory power for ministers to provide strategic guidance, allowing the government to define what growth means in different regulatory contexts.
House of Lords Report
The announcement follows a report from the House of Lords Industry and Regulators Committee, published today, which highlighted that it is currently unclear what supporting growth means for individual regulators with diverse responsibilities. The committee called for sponsoring departments to provide specific guidance on how growth fits alongside primary duties such as safety or environmental protection.
Financial Services Reforms
The financial services sector is also targeted for growth reforms in the King’s Speech. The Treasury has previously clashed with watchdogs in this area. Last year, Chancellor Rachel Reeves attempted to convene a meeting between banking watchdog officials and fintech giant Revolut as the firm sought to secure its UK banking licence. However, Bank of England Governor Andrew Bailey reportedly blocked the meeting over concerns of political interference in regulation.
Ring-Fencing Reform
The Enhancing Financial Services Bill, also announced in the King’s Speech, aims to update the ring-fencing regime that separates retail banking activities from investment. After nearly a year of lobbying, the government confirmed it will revise the 15-year-old legislation, which top lenders have branded redundant. The move is intended to unlock more access to finance for small businesses and bolster the SME lending landscape.
Other Measures
The bill also includes plans to streamline the complaint system for the Financial Ombudsman to curb accusations of quasi-regulation. It consolidates the Payment Systems Regulator (PSR) into the Financial Conduct Authority (FCA), as announced last year. Additionally, it seeks to scale back the Senior Managers and Certification Regime by removing direct regulatory vetting for approximately 50 per cent of mid-to-senior roles.
