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

Lord Sikka Excerpts

Tuesday 3rd November 2026 Grand Committee

[Lord Sikka (Lab)]

My Lords, I thank the committee for its report, which is a response to the Government’s deregulation agenda. It lowers the guard-rails on public protection, and even protecting capitalists from themselves, in the chase for economic growth. This project is full of contradictions. The committee is right when it states that:

“Done well, regulation can boost consumer confidence and provide certainty for businesses to invest and innovate”.


The banking crash, Grenfell, the Post Office and numerous other scandals have shown that regulation has not been done well. Instead, the regulators are now hobbled with a growth objective.

The report amplifies the Government’s claim that they want to cut financial costs, but we also need to consider the social cost of not doing proper regulation. Consider the case of HBOS frauds, which date back to 2002-07. Despite overwhelming evidence, the Serious Fraud Office, the Financial Services Authority, the Financial Conduct Authority and the City of London Police refused to investigate. Eventually, the Thames Valley Police and crime commissioner decided to bring a case. In 2017, two former senior bankers and four corporate turnaround specialists were convicted of fraud and received 47 years of prison sentence. That did not prompt regulators to investigate or secure compensation for the victims. Successive Ministers passed the buck to HBOS owner Lloyds Bank. In 2017, Lloyds appointed Dame Linda Dobbs to investigate and prepare a report on the £1 billion-worth of frauds. To this day, there has been no report, despite the promise that it would be published in 2018, and despite numerous questions in this House, Ministers—who are the ultimate regulators—will not give answers. The victims continue to suffer.

There is little empirical evidence to show that regulators can combine public protection and the growth objective. England’s water regulators announce fines for illegal and anti-social practices, and then, to show obedience to the growth objective, they quietly defer or waive the payment. Executives gaining from anti-social practices are neither fined nor prosecuted. This has neither engendered trust nor secured the required investment.

The dash for growth has turned town centres into economic deserts. Private equity has destroyed city centres. Some 30,000 jobs at Poundland and its suppliers could vanish because regulators simply wave through takeovers by private equity; they do not really want to stop them. Big accounting firms routinely deliver dud audits after public exposure and pass the costs to clients in higher fees. The regulator, the Financial Reporting Council, in pursuit of the Government’s growth objective, is now reducing the number of audit-quality inspections and will instead rely on self-certification of audit quality, a model that has been so successful in the water industry. Numerous leaks show that big accounting firms are key nodes in the global flow of illicit finances. Nothing happens to them. Recently, BBC’s “Panorama” programme looked at how Russian billionaire Roman Abramovich dodged taxes and moved his wealth to the British Virgin Islands. I was asked to examine those documents, and they show that Deloitte knowingly helped to falsify documents to hide Abramovich’s wealth and help him evade taxes.

One thing is certain: no UK Government will do anything to any big accounting firm. In the absence of effective regulation, corruption, fraud and illicit financial flows will grow exponentially and harm the legitimate economy. The report raises the question of accountability, but it does not make recommendations that could improve public confidence, such as having consumer-elected directors on the boards of regulatory bodies or giving consumers the right to vote on the pay of directors of regulatory bodies—that would concentrate a few minds, would it not? Currently, we have regulators who are outside the freedom of information net. Regulators of insolvency and auditing are not subject to freedom of information laws. Why is that, Minister? I hope to get some comment on that.

We are now light years away from Cadbury’s Quaker capitalism. In the era of predatory capitalism, too many are willing to make a fast buck without facing any of the consequences. We need robust regulators to promote public confidence, and that should be their only objective. Promoting business growth is a matter for Ministers.