How will regulators go about promoting economic growth?
The Public Accounts Committee (PAC) will examine how regulators can navigate the potential pitfalls of a higher risk appetite whilst promoting economic growth
Meeting details
Well-designed regulation can protect consumers, support investment and promote competition. However, it can also be viewed as imposing unnecessary burdens on business and deterring investment and growth.
With government’s Action Plan for regulators aiming to tackle risk aversion amongst regulators, they will increasingly need to balance risk appetite with growth promotion and consumer protection (e.g. attempts to make mortgages more accessible must be balanced with a higher risk of repossessions).
A recent report from the NAO found that the Action Plan has not stated how it expects regulators to balance the pursuit of growth against potential risks and departments have not set clear targets to reduce the administrative burden by the planned 25% (c.£5.6bn/yr by 2030).
MPs are likely to use this session to explore how regulators contribute to growth in the UK, and the progress that has been made in implementing the Action Plan. The Committee may also consider the true cost of regulation for business and how this could be more effectively reduced.
The level of risk that is acceptable both to the government and to regulators is also likely to be examined, as is the potential impact on consumers.