Last month in Liverpool, the Prime Minister pledged to deliver greater control of the economy. Again and again, he has acknowledged the public’s desire for a government that has their back, not least in the aftermath of the recent inquiry into the Grenfell disaster.
Yet at today’s international investment summit in London, his government seems to have thrown its weight behind a growth agenda driven by de-regulation. The strategy carries a huge political risk.
The evidence shows overwhelming voter support for robust, well-enforced regulations across all voter groups. Unchecked UK’s latest polling found that 79% of the public believe regulation is important for creating a ‘strong economy and stable society’. Crucially, 88% of voters who switched from Conservative to Labour agreed. An agenda which puts strong protections at its heart would be crucial for strengthening Labour’s fragile electoral coalition.
Conversely, an agenda that apes a hackneyed Conservative doctrine, would be a dangerous misreading of the electorate.
Voters live with the consequences of poor regulation
Eric Schmidt former CEO of Google, in discussion on sake with the PM says: “I was shocked when Labour said it was in favour of growth” as he goes on to praise Starmer’s pitch & says ‘ plenty of money’ ready to come to UK but adds scrapping regulation a key point. Schmidt jokes PM… pic.twitter.com/Uzi4JAQIEz
— Beth Rigby (@BethRigby) October 14, 2024
Keir Starmer acknowledged some regulation is “life-saving”, but said today the government will get rid of regulation that is “needlessly holding back” investment.
The electorate is tired of this narrative – and they’re tired because they know they have to live with the consequences. The higher water bills consumers are facing to clean up devastating river pollution after a decade of bumper shareholder dividends. The concern about their children’s online safety, as unchecked algorithms deliver harmful content directly into their homes. The families who tragically lost loved ones during the Grenfell blaze, after the gouging out of building safety.
Good businesses understand this. They know that good regulations drive innovation, address poor corporate practices, win public trust, open closed markets to competition, and reduce complexity for UK businesses. Those who want to invest in value-added, job-generating and sustainable enterprises will tell you that far from being a barrier to growth, well-designed regulations create the stability and certainty that they value. Some have even chosen to self-regulate when the government has sought to step back.
The UK is already one of the easiest countries in the developed world to set up a new company or register a property. What’s more, deregulatory experiments have failed on their own terms. Boris Johnson promised to ‘boost’ the country’s economy by launching a network of low regulation Free Ports. According to the Office for Budget Responsibility, their impact on UK GDP has been so small it would be “difficult to discern”.
Right now our regulators are struggling
So what would a pro-growth regulatory agenda that satisfies the electorate’s desire for control look like? Fixing our regulatory system would be an excellent place to start. Because our system is currently struggling, and badly. Agencies are depleted of staff and resources like never before.
Capacity constraints are placing an undue break on decisions. More importantly, they are also limiting their ability to do the kind of basic due diligence on tasks as basic as food standards and living wage checks, let alone hold big tech to account.
A pro-growth, pro-control agenda would embark on a programme of regulatory renewal, not crude deregulation. Investment in these agencies would be a win-win: unlocking the kinds of good decisions that businesses need whilst reassuring the public that the government has their backs. Deregulation in the context of a toothless regulatory system, on the other hand, would mean that wrongdoers will continue to get away with causing harm.
Good regulation can address the causes of populist discontent
Labour’s mandate is for a more secure Britain. Instead of deregulation, voters want an economy that values workers, safeguards the environment, benefits responsible investors and fosters innovation. Crucially, they want innovation in those sectors that deliver real public good and not the kind of short term profit that creates problems for future generations to solve. Labour needs to offer that alternative. This isn’t just good policy – it’s smart politics that addresses the root causes of populist discontent.
The time has come to reject the siren song of deregulation and start hearing the electorate. Labour’s future electoral success depends on recognising this fundamental truth and offering a vision of a UK economy built on strong foundations, not quick fixes that could exacerbate societal problems like the teenage mental health crisis.
By maintaining a commitment to strong, well-enforced regulations, Labour can solidify its coalition and offer a genuine alternative to the failed policies of the past. This is the path to sustainable growth and a fairer Britain – and it’s what voters across the political spectrum are demanding.
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