All hail the regulator going for growth
At last month’s Investment Summit in the City, Keir Starmer set out an admirably clear view of how he wants this country’s regulatory bodies to work, telling delegates: “we will make sure that every regulator in this country, especially our economic and competition regulators, takes growth as seriously as this room does.”
There’s been no shortage of lip service on the topic in Labour’s first four months in charge. A new Regulatory Innovation Office has been set up ostensibly to “reduce the burden of red tape” and the Treasury has reportedly toyed with the idea of a shake-up at the Financial Conduct Authority.
The Prime Minister will be pleased, therefore, that at least one top regulator is way ahead of him.
The head of the Financial Reporting Council, Richard Moriarty, set out a vision of how the audit sector’s watchdog would move towards “supporting growth and the UK’s competitiveness” soon after taking up the role towards the end of last year. He was perhaps anticipating a formal change to his regulatory mandate brought in a month after he started by then Business Secretary Kemi Badenoch.
Moriarty also set about reforming two other key parts of his remit: the corporate governance code and the stewardship code.
While these are technically voluntary codes of practice they have taken on ever greater weight amid a growing focus on the application of environmental, social and governance policies in corporate Britain.
As City PM revealed yesterday, he is preparing to go further with a fresh consultation on changes to the stewardship code that could effectively relieve the requirement of businesses to demonstrate a commitment to delivering benefits “for the economy, the environment and society.”
The new proposal would simply require a demonstrable focus on the creation of “long-term sustainable value for clients and beneficiaries.” While Moriarty insisted that the move would in fact empower businesses “to think for themselves” some might see it as a flirtation with a more traditional form of corporate responsibility; to make money. That’s a view that hasn’t been heard for a while.
It may be an example other regulators are forced more firmly to follow this week. Rachel Reeves is said to be weighing up measures to whip them into line behind the government’s growth push.
Whether you can teach an old watchdog new tricks however, is yet to be seen.