CBI President calls for urgent regulatory overhaul to boost UK competitiveness

In a speech today (Wednesday 21 May) taking place at Singer Capital Markets, Rupert Soames, CBI, President will highlight the urgency of delivering a fresh regulatory landscape in the UK, “one which drives our international competitiveness and embeds both innovation and compliance.”  Soames will reiterate that regulation is not the enemy of enterprise but rather “one of our greatest assets.” However, as Soames will say, clarity was lost along the way when “we let complexity creep in, and courage leak out.” During his address, Soames will unveil the CBI’s Good Regulation Guide “a blueprint designed by business, to not just critique but offer constructive solutions.”

Whilst the government has taken initial steps with its New Approach policy paper, the UK’s regulatory framework remains suboptimal.  Findings from a 2025 CBI survey revealed that 38% of surveyed firms reporting a significant increase in regulatory burden over the past 5 years with some businesses incurring compliance costs of up to £50 million per year.

Soames will state that “practical reforms are not enough without consulting those who live and breathe these regulations themselves: that’s business.” Accentuating the need for a real consensus between business and government to “think more openly about risk appetite, while setting clear red lines for the protection of consumers and businesses”.  Soames will also highlight the critical timing, stating “none of this should be done in isolation” particularly as “the UK has a golden opportunity to reduce both trade and regulatory barriers with the EU, as part of the EU-UK reset.”

With the forthcoming Industrial Strategy expected to address the challenge of regulation, the CBI is calling for the government to grasp the opportunity to reform the regulatory system to support the delivery of the government’s identified growth sectors, as well as creating a more dynamic regulatory environment for the economy.

In its most significant, cross-economy piece of work on regulation since Brexit, the CBI’s Good Regulation Guide offers an industry-led perspective to some of the most pressing economic challenges. Steered by the CBI’s Regulatory Reform Taskforce, a cross-economy group of businesses from sectors throughout the regulated economy, the Good Regulation Guide provides over 50 recommendations spanning regulated industries, growth sectors, and the foundational economy to support the government’s work ahead of the launch of the Industrial Strategy.

By embracing a smarter and more strategic approach to regulation, the UK can unlock greater investment, stimulate innovation, and secure long-term prosperity, ultimately helping to "get us back on track for growth" as Soames will emphasise.

The Good Regulation Guide outlines four key domestic priorities for policy co-design between industry and government:

1. Ensuring the UK’s future regulatory regime is outcome-focused and principles-based

Recommendations include:

• The government should commit to adopting outcomes-based, principles-led regulation more widely, starting with strategically important sectors such as water and leverage the UK Regulator Network (UKRN) as a potential convener to drive innovation and best practices.
• Undertake a joint review, led by the DBT and HMT to assess how regulators can adopt this approach effectively. Introducing clear metrics will ensure regulation delivers intended outcomes, strengthens consumer protection, and supports market competition.

2. Placing standards integration at the core of regulation

Recommendations include:

• The government should commit to leveraging standards adoption, where appropriate, as a flexible alternative to more rigid regulatory measures. To realize this, the government must enhance its understanding of standards, educate policymakers, and foster collaborative partnerships with businesses, consumers, and regulators.
• The Regulatory Innovation Office (RIO) should initially pilot this approach within its four focus sectors before scaling it across the wider economy. When combined with complementary regulation, this approach can create a dynamic and efficient regulatory environment.

3. Embedding a more robust, data-driven baseline within the future regulatory regime

Recommendations include:

• The government should commit to a targeted audit of regulatory costs, in high growth and/or enabling sectors from the industrial strategy. This audit should serve as a new baseline, assessing the average cost of economic regulatory compliance, to support the Department for Business & Trade’s Better Regulation ambitions.

4. Cementing the strength of the Industrial Strategy through clear and targeted regulatory changes

Recommendations include:

• Re-commit to a Regulators Council within the government to enhance strategic dialogue between regulators and sponsoring departments. This Council should be formally supported by the CBI’s annual Business-Regulator Forum. It should precede Council meetings and inject the voice of the regulated into progress discussions. This will provide a more visible and signposted series of moments to assess regulatory policy reform and address the challenges and opportunities facing heavily regulated sectors and/or those on which the success of the industrial strategy relies.
• Enhance parliamentary and select committee oversight to ensure regulators effectively balance their objectives while aligning with the government’s economic strategy. The DBT Select Committee and Parliament should provide clear scrutiny on regulators' capacity, resourcing, and ability to adopt risk, ensuring they have the necessary support to deliver their mandates without compromising economic growth.
• Where regulators feel that their statutory duties are in conflict, they should have the capacity to request updated strategic guidance from their sponsoring department.
• Sponsoring departments must ensure that funding settlements, such as those for the Medicines and Healthcare Products Regulatory Agency (MHRA) which issue ‘approvals or licenses,’ are regularly reviewed to ensure appropriate levels of funding are in place to deliver timely decisions around market approvals and incorporate expanding remits, including effectively regulating new technologies like AI.

 

Rachel Fletcher, Director of Regulation and Economics, Octopus Energy Group, said:

“Too often our current regulatory framework stifles innovation in the areas that matter most for people. In rapidly changing industries like energy, regulators should drive progress - not hold it back with slow, cumbersome and inconsistent processes.
 
"We need a more strategic, independent regulatory system that prioritises outcomes and keeps pace with the needs of households and the economy. That means setting clear targets to cut red tape and speed up processes and approvals - so innovation can thrive where it’s needed most.”

Vivienne Stern, CEO, Universities UK, said:

“Universities support regulation and understand the importance of proper oversight to maintaining their global reputation for excellence. However, regulation of universities must be proportionate, and not slip into being overly burdensome. To maximise their contribution to the growth agenda, universities need to focus on innovation and transformation and not have scare resources spent on regulation that adds little or no value.”