Time is Money: How Regulators Can Support Growth (Industry and Regulators Committee Report)

Baroness Lloyd of Effra Excerpts

Tuesday 3rd November 2026 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Innovation, Science and Trade (Baroness Lloyd of Effra) (Lab)]

My Lords, I am pleased to respond for the Government. I join others in thanking my noble friend Lady Hayter of Kentish Town for securing today’s debate and for her leadership of the Industry and Regulators Committee’s inquiry. I also thank all of the noble Lords who contributed to the report, as well as all noble Lords who have made contributions today; they have brought the combined expertise of so many here today.

The committee’s report, Time is Money: How Regulators Can Support Growth, provides a thoughtful and constructive examination of how regulation can better support investment, innovation and productivity. We agree with its central message that effective regulation is essential to a strong economy but unnecessary delay, duplication, complexity and uncertainty can deter investment and slow innovation.

As we have heard today, regulation is not inherently a burden. Well-designed regulation protects consumers, workers, communities and the environment. It creates fair markets, builds public confidence and gives businesses the certainty they need to make long-term investments. Therefore, our objective is not simply less regulation but better regulation: regulation that is proportionate, predictable and effective; regulation that keeps pace with technological and economic change; and regulation that supports growth while maintaining essential protections.

The noble Lord, Lord Ashcombe, asked what action we are taking to reflect on the report. The committee rightly called for greater clarity on what supporting growth means for individual regulators. We have acted on that recommendation. We have agreed 54 outcome-focused growth goals with 12 key regulators. These translate the Government’s wider growth mission and industrial strategy into practical priorities that are tailored to each regulator’s remit. The goals are supported by measurable, time-bound results, as well as an explanation of how their delivery is expected to support economic growth.

Growth goals are currently published on the regulator performance dashboard to improve transparency. The goals do not direct individual regulatory decisions or undermine operational independence. The Government set the strategic direction and regulators remain responsible for applying it independently, in accordance with the law and their statutory duties. Through the regulation action plan and the regulator effectiveness and reform programme, we are also tackling delays, duplication, fragmented processes and unclear guidance. We are working to improve digital services and enable businesses to provide information once, rather than repeatedly, to public bodies.

As the noble Lord, Lord Bilimoria, and others have stressed, timeliness is key. The Government and regulators have already made significant progress in speeding up regulatory processes. The Environment Agency has made its permitting service more efficient and transparent. It has cut its permitting queue by 1,000 permits, cleared backlogs in several categories and introduced a tracked service that now supports more than 60 projects. It also hit its target of responding to 95% of planning consultations 21 days ahead of schedule, and has met it consistently since. However, that is clearly not enough, and we need to do more.

Several noble Lords have, understandably, raised the balance between growth and vital protections; my noble friend Lord Chandos put that very clearly. Let me be clear: supporting growth does not mean lowering standards or accepting unacceptable risks to the public. Growth and high standards are not alternatives. Regulators must continue to fulfil their statutory responsibilities, while ensuring that those objectives are delivered proportionately and without unnecessary barriers to investment and innovation.

The forthcoming regulating for growth Bill will strengthen the growth duty for key regulators. This will be supported by statutory ministerial economic growth steers, tailored to different sectors—reflective of the points made today that different sectors regulate very different industries—and reporting requirements to strengthen accountability. This responds to the call by my noble friend Lady Hayter and many others, such as the noble Lord, Lord Bilimoria, and my noble friend Lord Smith of Ranmoor, for us to be clear on the Government’s priorities and risk appetite to allow regulators to make confident decisions, in particular in areas of innovation.

Many noble Lords focused, crucially, on the importance of innovation and on creating a regulatory framework that supports our innovative UK businesses. The Bill will also introduce cross-economy sandbox powers, allowing innovative products, technologies and services to be tested safely where existing legislation creates a barrier. The Regulatory Innovation Office, led so well by the noble Lord, Lord Willetts, has led to many advances in equipping regulators and having discussions with them on how to regulate in this innovative space, and it has provided practical examples which can be taken forward in these formal sandboxes when we are able to legislate for them. The modern world is changing rapidly, and our legislative framework must be able to keep pace with innovation and technological advances, so I agree very much with those noble Lords, for example the noble Lord, Lord Udny-Lister, who exhorted us to update our laws to take account of this. The Bill will provide greater scope to test innovative approaches, using real-world evidence to inform how successful approaches should be implemented more widely.

My noble friends Lady Hayter and Lord Chandos asked about the timing of the Bill. It is set to be introduced in the current Session of Parliament, when parliamentary time allows. At present, when regulators and businesses identify a better approach, existing legislation does not provide the ability to test this in practice. My noble friend Lady Hayter put her finger on this: primary legislation remains the appropriate route for many changes, but it does not offer the flexibility to test and respond at pace.

On the question from the noble Lord, Lord Black, this is a cross-cutting framework Bill, so it will not include any specific technologies or sector regulation. Overall, this is not deregulation by another name: testing will take place under controlled conditions with appropriate safeguard mechanisms, we will suspend or end testing where necessary, and any lasting change will be subject to appropriate scrutiny.

On my noble friend Lord Nagaraju’s observation, we are acutely aware of the needs of smaller innovative AI businesses to access these. That is part of the discussions we have been having with the Regulatory Innovation Office to date, and we will continue to bear it at the front of our mind.

The committee was also right to emphasise that time matters. Low or uncertain regulatory decisions impose real costs: they can delay investment, prevent products from reaching the market and make the United Kingdom a less attractive place in which to do business. We are increasing transparency through the regulator performance dashboard, which brings together performance information for 16 key regulators and is being expanded to cover regulatory approvals.

The noble Baroness, Lady Valentine, asked about KPIs. We are also working with regulators to improve KPIs so that they measure genuine performance, including timeliness, quality, certainty and outcomes, rather than activity alone. We recognise that poorly designed KPIs can give the appearance of progress when there is not.

Many noble Lords, such as the noble Lord, Lord Fuller, stressed the importance of actual change and the importance of this being felt through the whole of the regulator. Performance will be considered through reviews led by the Secretary of State and independent reviews, allowing underperformance to be challenged and targeted action to be agreed. The regulator sponsorship charter also sets out the responsibilities of sponsor departments.

My noble friend Lord Sikka is right that accountability is key. Accountability must extend through regulators, departments and government, and ultimately to Parliament.

The ultimate test will be what businesses experience: whether decisions are faster and more predictable, processes are simpler, duplication is reduced, and whether unnecessary barriers to investment are removed.

A number of noble Lords asked about the lead regulator model. We recognise that there is more to do here and that complex and fragmented regulatory processes can add delay and cost to major infrastructure projects. That is why the lead environmental regulator pilots are testing how environmental regulators can provide clearer and earlier co-ordinated advice to developers, while the wider reforms are focused on improving regulatory approvals and reducing unnecessary duplication. We are committed to learning from these pilots and taking forward their conclusions.

In response to the question from the noble Baroness, Lady Harding, on progress on the administrative burden of regulation, I underline that that is in addition to all the other changes that we are making to improve regulatory decision-making and regulatory transparency to reduce the effect on business. The Government are committed to reducing the annual administrative burden of regulation to business by 25% over this Parliament. That is equivalent to £5.6 billion against a baseline of £22.4 billion. We have delivered or identified £2 billion in net annual administrative burden savings, putting us over one third of the way towards the target. The Chancellor has now also announced up to £640 million in additional gross administrative savings for businesses in the Budget. We recognise that smaller firms feel regulatory complexity particularly acutely. The Small Business Regulatory Taskforce has made 15 practical recommendations, and we have accepted all but one.

Regulation also does not stop at national borders. We will continue to pursue international regulatory co-operation and—going to my noble friend Lady Gill’s point—the benefits of recognition of trusted overseas approvals. Doing so reduces unnecessary friction and benefits UK businesses and consumers, while preserving our ability to regulate in the national interest.

I agree with the noble Lord, Lord Bilimoria, on the importance of digital trade to the United Kingdom, which is a feature of our trade strategy.

Many noble Lords asked about digital markets and AI: the noble Lord, Lord Black, my noble friend Lady Gill and the noble Baroness, Lady Harding. The Government recognise the important role that competitive digital markets play in supporting innovation, investment, productivity and consumer choice in the UK economy. In their strategic steer to the CMA, the Government set out how they expect the CMA to operate the digital markets regime independently, flexibly, proportionately, and collaboratively to effectively unlock opportunities for growth across the UK digital economy and wider economy. The Secretary of State has made it clear that the Government are not issuing a new strategic steer.

To the questions my noble friend Lord Chandos and other noble Lords asked about our AI approach, as my noble friend and others highlighted, this is a general-purpose technology, and the Government’s approach is principally that it is best regulated at the point of use.

The committee’s report has made an important contribution to this agenda. The Government agree that regulators need clearer direction, transparency and stronger accountability if they are to support growth effectively. We will judge success by outcomes: simpler and more predictable regulation, faster decisions, stronger investment and innovation, and continued public confidence in the protections that regulation provides.

I again thank the noble Baroness, Lady Hayter, the members of the committee, and all noble Lords who have contributed today. We will continue to work with Parliament, regulators, businesses and wider stakeholders to deliver a regulatory system that protects the public, commands confidence and supports sustainable economic growth across the United Kingdom.