As this piece was being written, rumours were circulating, following an article in the Financial Times, that UK ministers might be contemplating diluting the Audit Reform and Corporate Governance Bill, announced in the King’s Speech last July. We have responded with a media statement calling on the UK government to maintain its commitment to this important legislation and have followed up with a letter to the Secretary of State, Jonathan Reynolds, and his business minister, Justin Madders, who is in charge of the Bill. We’re urging them not to water down or further delay the proposals, and we will be talking to officials in the Department for Business and Trade again this month.

There is a clear pattern emerging in high-profile speeches from Keir Starmer, Rachel Reeves and Reynolds about the need to do everything they can to improve economic growth, if needs be, at the expense of regulation. Writing in The Times in January, the Prime Minister said the government was laser focused on what he described as regulatory “overreach”, and he promised to end “vexatious legal challenges” and “endless consultations with a myriad of government regulators”. He went on to talk about removing rules that get in the way of business growth and expansion.

In Davos in January, Chancellor Reeves said that “every regulator, no matter what sector, has a part to play by tearing down the regulatory barriers that hold back growth”, stating she wants to see “this mission woven into the very fabric of our regulators through a cultural shift from excessively focusing on risk to helping drive growth”.

We have again – at the risk of sounding like a broken record – stressed the importance of the measures we hope to see in the draft bill to create better accountability for decision making. We’ve expressed our concern that abandoning, delaying or even neglecting reform could undermine the attractiveness of the UK’s economic environment in the longer term.

In our media statement, Bruce Cartwright CA said: “These reforms, initiated following the findings of the Kingman, CMA and Brydon reports, are essential if the UK is to maintain and protect its global reputation as a trusted and stable business environment. Regulation should not be viewed as the enemy of growth, but as a framework that supports it by providing the public and investors with greater confidence that the UK is a safe place to do business.”

He goes on to urge the government “not to dilute these reforms in a way that could lead to weaker oversight of board decision-making or compromise the UK’s high standards”.

“We want to see carefully crafted legislation that strikes the right balance between supporting growth and avoiding unnecessary burdens on businesses”

We have repeatedly said, and will continue to say, that we want to see carefully crafted legislation that strikes the right balance between supporting growth and avoiding unnecessary burdens on businesses. This can be achieved through proportionate, purposeful regulation that builds on what has already been achieved on a voluntary basis. 

We’re also carefully watching a potential watering down of sustainability reporting rules in the EU. And of course the US has now withdrawn from the Paris climate change agreement.

ICAS is active in both Scotland and Westminster – we’ll be at the Scottish Labour Conference and its business day in Glasgow in February. Plans are already in place for a Westminster dinner with MPs in March to raise these and other concerns.

We’ll continue to make the case for appropriate regulation crafted in a proportionate and purposeful way as a positive force for growth. Meaningful rules and high standards help us all to do the right thing and to do our jobs better – and that, not a bonfire of regulations, is what creates a better environment for attracting the investment we all want to see.

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