Regulation Action Plan: Corporate Reporting
(1 day, 23 hours ago)
Written StatementsRead Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Business and Trade (Blair McDougall)
The Chancellor today set out the progress that has been made to deliver on the Government’s vision for ensuring regulators and regulation support growth. The Government have published “Regulation Action Plan—Progress Update and Next Steps”, setting out how the Government are going further to realise the vision we set out in the action plan in March 2025.
This progress update was accompanied by a package of specific reforms, in which the Government commit to reducing the annual administrative burden of regulation on businesses by £5.6 billion by the end of this Parliament. It also outlines the actions already taken to meet this target, including that six months after we announced our action plan, we have already identified and announced £1.5 billion in gross savings, which will contribute to the target to reduce the regulatory administration burden by 25% by the end of this Parliament.
Department for Business and Trade commitments
My Department has undertaken critical work to reduce the regulatory burden on business. We have already:
increased the monetary size thresholds for micro, small, medium and large-sized companies by approximately 50%, enabling up to 132,000 companies to benefit from lighter-touch requirements; and we are eliminating duplicative or redundant reporting requirements from the director report and director remuneration report and policy, delivering £185 million in administrative savings for businesses every year.
launched a call for evidence on improving the UK’s licensing regime for the hospitality sector, following the recommendations of my Department’s licensing taskforce.
issued a strategic steer to the Competition and Markets Authority setting out how Government expect the CMA to support economic growth across all aspects of its activity. In parallel, to support growth, investment and business confidence, the CMA is embedding the four principles of pace, predictability, proportionality and process across all its work.
These actions are based on direct feedback from businesses about how certain regulations act as barriers to their success. This feedback is captured in the 2024 business perceptions survey, which I have published today. As part of the actions set out by the Chancellor in our progress update on the regulation action plan, my Department will:
run a series of policy sprints across specific sectors to identify regulatory barriers which affect companies with innovative business models and high potential scale-ups. We will also deliver a range of regulatory deep dives, looking across each sector of the economy and delivering strategic reforms that best support business.
consult in the coming weeks on proposals to provide greater certainty for businesses on whether transactions will be subject to merger control, proposals to ensure remedies are regularly reviewed, and changes to how the CMA makes decisions in mergers and markets investigations.
work with the CMA as it launches two business surveys during this financial year, aimed at gathering valuable insights and further strengthening its engagement with the business community.
bring forward a consultation on specific reform proposals to the opt-out class action regime to strengthen predictability and cost-effectiveness, and ensure effective consumer protection.
deliver in partnership with the Financial Reporting Council to clarify the UK corporate governance code guidance, making it clear that the payment of non-executive directors in shares is appropriate, enhancing the ability of UK listed companies to attract the highest calibre of talent from across the global stage.
commission the Investment Association to discontinue its public register, which tracks shareholder dissent, thereby removing duplication with UK corporate governance code requirements.
Modernisation of corporate reporting
We are committed to going further and improving the regulatory landscape for businesses. A key part of the package is my Department’s plans to modernise and simplify the UK’s corporate reporting framework. This includes legislative changes and an ambitious and holistic consultation planned for next year. Together, these measures could save UK businesses around £230 million per year in reporting costs.
The legislative changes, which we aim to bring forward as quickly as possible, will implement two significant exemptions, to lift up to 51,000 thousand companies from unnecessary reporting obligations, as well as removing the requirement to produce a director’s report for all companies required to produce one. The changes we intend to make are:
first, the Government will aim to exempt most medium-sized private companies from the need to produce a strategic report as part of their annual report and accounts. This means that medium-sized businesses that can benefit from existing exemptions will no longer need to prepare narrative reporting, so they can focus on running their business, rather than producing information that is disproportionate to their scale and ownership model.
secondly, the Government will aim to exempt wholly owned subsidiaries from the need to produce a strategic report where their disclosure is included in the annual report of a UK parent. This will eliminate duplicative reporting within corporate groups.
thirdly, the Government will aim to remove the requirement for any company to produce a director’s report as part of their annual report and accounts. This report is often seen as a cluttered, compliance-driven document that has accumulated numerous disclosures over time, which offers little useful insight for investors. Through the removal of the director’s report, we will remove redundant and duplicative reporting, building on the changes that came into force earlier this year https://www.legislation.gov.uk/uksi/2024/1303/contents/made However, some useful reporting requirements, including reporting on energy and emissions, will be retained and moved elsewhere in the annual report.
Impact of changes
These reforms are anticipated to benefit up to 44,000 medium-sized private companies, and around 7,000 subsidiary companies, who will no longer be required to produce strategic reports. Approximately 440,000 companies will no longer need to compile a director’s report.
In October 2024, the previous Secretary of State for Business and Trade announced plans to consult in 2025 on measures to simplify and modernise the UK’s non-financial reporting framework. Stakeholder engagement over the summer indicated that only reviewing non-financial reporting would fall short of what is needed. Businesses, investors and professional bodies have urged the Government to adopt a holistic approach in order to consider the annual report and accounts in their entirety.
The Government have listened and expanded the scope of their reforms, now framed as the Modernisation of Corporate Reporting programme. A broad consultation will be delivered in 2026. To meet what industry has asked for, we will co-design reforms covering remuneration reporting, corporate governance reporting, and the financial reporting framework, as well as improving regulatory alignment across reporting frameworks, and we will consider how corporate reporting should function in a digital age.
This broader initiative reflects a commitment to far-reaching reform, aiming to restore company reporting to its original purpose, and providing concise, decision-relevant information for investors and creditors, while removing unnecessary burdens on business.
Next steps
The Government will continue to improve regulation in the UK, ensuring that it enables growth and does not unduly hold back investment.
To drive progress, I have also published “Unlocking Business: Reform Driven by You”, a business questionnaire, to gather direct insight from firms on where regulation is creating unnecessary burdens. This is a chance for businesses, investors, representative organisations and charities to tell us which regulations, forms, compliance processes and regulators are imposing the undue or unnecessary burdens, so we can deliver a pro-business programme of regulatory reforms.
The Government will continue to put industry at the heart of this programme, working with regulators and Parliament to ensure that the regulatory system protects consumers and supports competition, but also encourages new investment, innovation and growth.
The full regulation action plan progress update and business questionnaire are available on gov.uk.
[HCWS973]
Regulation Action Plan
(1 day, 23 hours ago)
Written StatementsRead Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Rachel Reeves)
Improving regulation in the UK, ensuring that it enables growth and does not unduly hold back investment, is an essential part of this Government’s growth mission and delivering on the plan for change.
In March, the Government published an action plan which set out how we will overhaul the regulatory system so that it not only provides critical safeguards and protects consumers, but drives sustained economic growth across the country, is targeted and proportionate, transparent and predictable, and keeps pace with innovation. To achieve that vision, the Government committed to delivering a package of reforms over the course of the Parliament that focus on tackling the complexity and the burden of regulation, reducing uncertainty across the regulatory system and challenging risk aversion.
Six months after the action plan’s publication, the Government are setting out the tangible progress we have made to deliver on that vision and setting out a range of new reforms to the same end.
The Prime Minister committed to reduce the administrative burdens of regulation on business by 25% by the end of the Parliament. We have now established a baseline for the administrative burden of regulation on businesses of £22.4 billion a year, which means that the Government target is to reduce the annual administrative burden of regulation by £5.6 billion by the end of the Parliament.
Alongside establishing a baseline, the Government have already taken action to meet the target, identifying £1.5 billion of administrative burden savings, for example through the Planning and Infrastructure Bill which is expected to deliver £272 million in administrative savings by the end of the Parliament; the establishment of the national underground asset register which will deliver over £185 million in administrative savings per year; and reforms to the information which the Prudential Regulation Authority requires from financial services firms, which are saving businesses over £100 million per year in administrative burdens.
We have simplified and streamlined the regulatory landscape, including through significant reforms to the Financial Ombudsman Service; the Government intention to abolish Ofwat and merge the water regulation functions of four different bodies into a single water regulator following the Independent Water Commission report; and delivering legislation to establish the fair work agency through the Employment Rights Bill, consolidating the functions of the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and the director of Labour Market Enforcement into a single public body.
The Government have also taken targeted action to ensure regulatory frameworks and processes support economic growth. We have published the UK’s modern industrial strategy and set out targeted regulatory reforms across eight high-priority growth sectors, such as overhauling our planning system, reforming the money laundering regulations to make requirements for around 100,000 businesses more effective and proportionate, and through the current statutory review of the UK’s medicines and medical device regulatory framework which will support responsible innovation, benefiting patients, the NHS and the economy. We will also take advantage of the opportunities from improving our bilateral relationship with the EU to ease burdens on business.
Today the Government have published “Regulation Action Plan - Progress Update and Next Steps”, setting out how the Government are going further to realise the vision set out in the action plan. Key actions include:
Tackling complexity and the burden of regulation
The Secretary of State for Business and Trade has made a written ministerial statement regarding legislative changes the Department for Business and Trade will bring forward to reform corporate reporting requirements, aiming to save businesses an estimated £230 million annually in administrative costs.
HM Treasury will consolidate the anti-money laundering and counter-terrorist financing supervisory functions of 22 professional services supervisory bodies. The Financial Conduct Authority will assume responsibility for this. Reform of the UK’s AML/CTF supervision regime will strengthen the UK’s defences against illicit finance, support sustainable growth, and simplify a complex regulatory system.
Following a review announced as part of the regulation action plan and delivered through the Cabinet Office’s review of arm’s length bodies, the Secretary of State for Business and Trade intends to abolish the British Hallmarking Council and consolidate its functions alongside wider product regulation functions when parliamentary time allows.
Reducing uncertainty across our regulatory system
The Government will reform the growth duty so that the legal framework is clearer, more focused and ensures regulators must consider and promote growth. We will work with regulators to ensure they have clarity from Government regarding what growth means for them.
The Secretary of State for Business and Trade will lead efforts to strengthen regulator accountability by establishing a single regulator performance dashboard, using stakeholder feedback to support rigorous scrutiny of key performance indicators, and chairing a new regulators council to strengthen accountability and transparency across UK regulators.
Consistent with the objectives of the CMA’s own reforms, DBT will consult in the coming weeks on proposals to provide greater certainty for businesses on whether transactions will be subject to merger control; proposals to ensure remedies are regularly reviewed; as well as changes to how the CMA makes decisions in mergers and markets investigations. This includes replacing the CMA’s panel model for decision-making by replicating the Digital Markets Board Committee model, for both the CMA’s mergers and markets functions.
Challenge risk aversion
The Government will ensure that the UK is ready to take advantage of the growth opportunities presented by the next generation of aerial vehicles, including by publishing an investor-focused commercial road map for launching private drone operations in the UK, and going further to remove friction within the regulatory environment.
The Department for Science, Innovation and Technology will bridge the gap between innovation in AI and regulation through consulting on establishing an AI growth lab—a pioneering cross-economy sandbox, enabling carefully supervised deployment of responsible AI applications that current regulation limits.
The Secretary of State for Business and Trade has also published unlocking business: reform driven by you, a business questionnaire to gather direct insight from firms on where regulation is creating unnecessary burdens.
These actions are grounded in what businesses say about the ways in which regulation is an obstacle to their success. That feedback is detailed in the 2024 Business Perceptions survey, published today by the Secretary of State for Business and Trade.
The Government will continue working with industry, regulators, and Parliament to ensure that the regulatory system protects consumers and supports competition, but also encourages new investment, innovation and growth.
The full regulation action plan progress update is available on gov.uk: https://www.gov.uk/government/publications/a-new-approach-to-ensure-regulators-and-regulation-support-growth
[HCWS975]
Online Safety: Protections for Women and Girls
(1 day, 23 hours ago)
Written StatementsRead Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Kanishka Narayan)
The Government are committed to making the internet a safer place and bringing in new protections for UK internet users. Today I am laying in draft the Online Safety Act 2023 (Priority Offences) (Amendment) Regulations 2025. This statutory instrument seeks to update the list of priority offences under schedule 7 to the Online Safety Act 2023, to add the cyber-flashing offence at section 66A of the Sexual Offences Act 2003 and the offence of “encouraging or assisting serious self-harm” in section 184 of the OSA.
The addition of these offences to the priority offences list is another step forwards in our mission to halve violence against women and girls. It will also help to reduce self-harm and suicide.
By adding the above offences to the list of priority offences, online services, such as social media platforms and search services, will need to prioritise these offences under their Online Safety Act duties for illegal content and take steps to ensure their services are not used to facilitate or commit the cyber-flashing or encouraging or assisting serious self-harm offences. Services must also take steps to search for, remove, and limit people’s exposure to this content. Ofcom’s codes of practice set out the measures that services can take to comply with their duties.
[HCWS974]