Starmer asks UK regulators for ideas to boost growth
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Prime Minister Sir Keir Starmer, alongside Chancellor Rachel Reeves and Business Secretary Jonathan Reynolds, has called on the UK’s main regulatory bodies to submit ideas on how they could help boost economic growth. In letters sent to regulators such as Ofgem (the energy regulator), Ofwat (the water regulator), and others just before Christmas, the government has asked them to propose reforms by mid-January. This move comes in response to recent economic data showing that the UK economy stagnated between July and September.
Shadow Business Secretary Andrew Griffith quickly criticized the government’s request, suggesting it reveals that Starmer’s administration is struggling to foster growth. He argued that Starmer was essentially “begging” his own government to come up with growth strategies following the perceived economic harm of Labour’s recent Budget. The letters, which were also sent to the Environment Agency, the Financial Conduct Authority (FCA), and healthcare regulators, were first reported by Sky News.
The correspondence, signed by Reeves and Reynolds, emphasized the government’s belief in the importance of collaboration with regulators to ensure a regulatory environment that fosters growth and investment while respecting the independence of these bodies. The FCA responded, stating it would submit a reply in the new year, noting that it had already introduced measures since the summer aimed at supporting growth. These included reforms to the way retail investors receive information and proposals to improve value for money in workplace pensions.
The letter emphasized that improving regulation to support growth and encourage investment is a key component of the government’s broader growth agenda. Economic growth has been a central theme for many of the government’s policy initiatives. For instance, Communities Secretary Angela Rayner has advocated for reforms to the planning system to encourage more house-building, while the Chancellor has called for more “sensible risk-taking” in the financial services sector.
This letter suggests that Starmer is committed to using every available government lever, including regulatory bodies, to ensure that Labour’s goal of achieving the highest sustained economic growth in the G7 becomes a reality. It also signals Starmer’s concern that regulators may sometimes hinder economic growth by placing barriers on business activity—a stance typically associated with Conservative politicians but one that Starmer is increasingly embracing as part of his economic strategy.
In a speech earlier this month, Starmer described “the regulators, the blockers, and bureaucrats” as part of an “alliance of naysayers” that prevents the country from achieving its full potential. In October, during an international investors’ summit in London, he stated, “We’ve got to look at regulation across the piece, and where it is needlessly holding back investment… mark my words, we will get rid of it.” This language reflects Starmer’s intention to streamline regulation in ways that encourage investment and economic activity.
However, Starmer’s approach is likely to face resistance from various sectors where regulation is seen as necessary to maintain fairness, consumer protection, and environmental standards. Critics argue that what the government views as regulatory obstacles are, in fact, essential safeguards. Conservative MP Andrew Griffith also criticized Starmer’s plans, suggesting that if the UK is to experience the fastest growth in the G7, it would be more likely if the government returned to the economic policies of the Conservative era, before Labour assumed power.
Despite these criticisms, Starmer has been vocal about the long-term challenges facing the UK economy. Earlier this month, he acknowledged to MPs that it would take time for the public to feel an improvement in their living standards. Similarly, Reeves commented on the significant difficulty of addressing the economy after “15 years of neglect,” a reference to the previous Conservative-led governments. Shadow Chancellor Mel Stride also criticized the current government, stating that the recent economic figures showed that growth has faltered during Labour’s leadership.
Starmer’s push to engage with regulators represents a strategic move to address the UK’s stagnating economy by recalibrating regulatory frameworks to better align with growth goals. This approach reflects his broader vision for economic reform, where reducing bureaucratic hurdles is seen as crucial for fostering investment and competitiveness in an increasingly globalized market. However, whether this approach will successfully reconcile the need for regulation with the drive for economic expansion remains to be seen, especially as resistance from various sectors grows.
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