LONDON — U.K. Prime Minister Keir Starmer on Monday vowed to slash regulatory red tape to boost anemic investment in the country.
“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,” he told delegates at the government’s inaugural International Investment Summit, held at London’s Guildhall.
“It’s time to upgrade the regulatory regime. We will rip up the bureaucracy that blocks investment,” he added.
Starmer did not say exactly which regulations would be changed. However, the government said in a statement that it was “reviewing the focus” of major regulators, with the Competition and Markets Authority (CMA) in particular being charged to “prioritise growth, investment, and innovation.”
The regulatory overhaul is just one part of the Labour Party’s plans to place Britain at the forefront of emerging opportunities.
Last week, it launched a new Regulatory Innovation Office to reduce the burden of red tape for businesses working on “game-changing” technologies. Meanwhile, ministers have been introducing changes to the planning system to boost new building projects.
Growth as Labour’s “No.1 test”
The prime minister restated that growth was the “No. 1 test of this government,” and reiterated plans for the U.K. to become the fastest-growing G7 economy.
Starmer also outlined stability, strategy, regulation and improving Britain’s global standing as “four crucial areas” in his pitch for Britain.
“Private sector investment is the way we rebuild our country and pay our way in the world,” he said.
Speaking during a panel discussion with Starmer on Monday, Google‘s former CEO Eric Schmidt said he was “shocked” when he heard that the Labour party had become strongly in favor of growth.
Schmidt added that he was waiting to see “how you pull it off,” urging the government to invest further in artificial intelligence to achieve its wider growth goals.
Some have expressed concern over the government’s proposed regulatory rollback, warning that certain measures could risk harming growth and innovation.
“There are regulations that are bad for innovation, productivity and growth and there are regulations that are absolutely necessary for them,” Ali Nikpay, partner co-chair of the antitrust and competition group at law firm Gibson Dunn, told CNBC via email.
“Take merger control: The government wants the CMA to be more hands off. That might give a few sectors a sugar rush in the short run as deals that would have been blocked in the past are cleared. But in the longer run that’ll reduce innovation and growth across the economy,” he added.
Labour has been attempting to paint a more positive picture of the economy after being accused of doom-mongering in its early months in office. It is also seeking to position itself as a reliable partner after years of upheaval — including Brexit — a slew of prime ministers and a bond market selloff.
Opening the summit, Business Minister Jonathan Reynolds heralded a “new era of stability, of openness, [and] of commitment to use our mandate” to remove barriers to business.
The government on Sunday announced the launch of a new industrial strategy, designed to focus on eight “growth-driving sectors.” Those include the creative industries, financial services, advanced manufacturing, professional services, defense, tech, life sciences and clean energy industries.
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