From the desk of Rain Newton-Smith

Business leaders once again find themselves pondering the shape and size of Britain’s economy post-Brexit. Brexit was always designed to be a two-part plan. Part one was leaving. But, as noted in the report by the Public Accounts Committee, for some sectors it’s been a triple whammy of red-tape, double regulation and rising compliance costs. Part two: better growth and greater competitiveness than ever before.  And on that front, we haven’t had the chance to get started.

The onus is on both business and the government to use leaving the EU as a catalyst for delivering better growth and greater competitiveness. The Bank of England’s estimates of GDP figures last week – dented by December’s restrictions – demonstrate the urgency to return to growth of more like 2 to 2.5 per cent. The long-term health of our public services and the balance of our economy throughout the UK is at stake.

The UK has the opportunity to lead the world in developing future regulation that unleashes sustainable growth. Post-Brexit Britain gives us the burning platform we need to reach the UK’s economic potential. It provides the freedom to make our own big bets, lead the world on modern and empowering regulation, and awaken us from the flatlining productivity that took hold after the financial crisis.

With Jacob Rees-Mogg as the newly minted Brexit Opportunities Minister, there should also be an office for future regulation.

As the government has said, this isn’t about divergence for the sake of it. Nor are firms clamouring for a bonfire of regulations. But it is about being smarter – and better – to improve our competitiveness by becoming the most future-focused regulatory environment in the world. Harness the UK’s historically good reputation by putting innovation and investment at the centre of the regulation agenda, allowing us to become a leader in new and emerging sectors, from AI to gene editing.

The focus should be the big bets for our economy. Regulation can be more agile – changing when out of date and reacting with speed to emerging pressures, and proportionate, rooted in a better balance between investment and consumer protection. And finally, it would be more dynamic, allowing regulators to act quickly and decisively – just as we saw with the vaccine, when the MHRA enabled the UK to lead the world.

To date, UK regulation has aimed to protect low prices for consumers in the short term, without the right focus on quality for consumers in the long-run and deprioritising UK investment and innovation. This needs to change. Indeed, this week’s evidence from Ofgem shows the importance of smarter, better regulation.

For example, reforming the Solvency II insurance framework for investment could unlock £95bn to supercharge growth. In fintech, taking a joined-up approach to new regulations has already led to a 217 per cent increase in investment – hitting $11.6bn in 2021.

Yesterday, Rees-Mogg wrote in The Sun imploring readers to write to him about what regulations they want abolished. So here’s a letter: let’s get to part two and design an approach to regulation which keeps us ahead of the curve on climate, on skills, on investment. It is essential if we’re going to lift our ambitions and grow our economy.

Article originally published here.