Government's effort to minimize bureaucracy reportedly holds slim prospects of achieving its goal, according to Andy Haldane.
In an impassioned speech at the City AM Awards, former Bank of England Chief Economist, Andy Haldane, lambasted the government's regulatory reform efforts, arguing that they are mostly ineffective without a shift in the legal mandates of watchdogs. Criticizing the government's reliance on "exhortation and press releases," Haldane urged ministers to provide regulatory bodies with the "air cover" to take on more risk by altering their regulatory mandates via legislation.
Haldane, having served as the Bank's top economist from 2014 to 2021, called for a substantial reduction in both the number of regulators and their rulebooks. He suggested that a 50% reduction could be easily achieved without sacrificing any significant substance.
Addressing a gathering of 500 guests from the City and wider business community, Haldane painted a picture of a world wracked by risk and risk-aversion. With businesses and investors scarred by various crises, from the financial crisis and the Euro crisis to Brexit, Covid, and US tariffs, the resulting risk-aversion has led to a stagnant environment of "no or low return, no or low investment, low or no growth."
Haldane emphasized that this situation is the tale of the past two decades and urged a shift toward greater risk-taking supported by radical regulatory reform to break the cycle of "doom and gloom" driven by "uncertainty, risk-aversion, and low growth."
Prime Minister Keir Starmer has blamed red tape for hindering billions of pounds of investment in Britain, vowing to eradicate needless regulations. While Haldane applauded the government's deregulation direction, he emphasized the need for substantive action, stating that "words are cheap."
Haldane implored for a full-throated, whole-hearted approach to industrial strategy backed by government action and funding, rather than mere rhetoric. He believes the government's upcoming industrial strategy must leverage the UK's strengths, particularly in financial services, to drive innovation and risk-taking.
In conclusion, Haldane expressed optimism that the City of London could turn global uncertainty to its advantage, becoming a champion of innovation to manage and mitigate risk. To achieve this goal, he urged bold action, leaning into risk rather than shying away from it. His speech emphasized the need for streamlined regulatory frameworks, enhanced efficiency, and promotion of innovation while maintaining necessary safeguards.
In his speech at the City AM Awards, former Bank of England Chief Economist, Andy Haldane, advocated for a shift towards greater risk-taking supported by radical regulatory reform, suggesting that a reduction in regulators and their rulebooks could drive innovation in financial markets and businesses. Prime Minister Keir Starmer has pledged to eradicate unnecessary regulations, yet Haldane emphasized the need for substantive action, arguing that the government's upcoming industrial strategy must leverage the UK's strengths in financial services and promote risk-taking to foster innovation.
