Chancellor Rachel Reeves is preparing to unveil a major “attack on corporate bureaucracy” that the Treasury says will cost companies up to $6 billion.
Reeves will address more than 350 business leaders, regional mayors and global investors at the government’s first regional investment summit in Birmingham, revealing plans to reduce “unnecessary red tape” and remove regulatory burdens on SMEs as part of a wider productivity agenda.
Key measures include removing the requirement for small business directors to file board reports with Companies House – a change expected to benefit more than 100,000 businesses, including microbreweries, independent retailers and hotel operators.
The move is part of a broader effort by Labor to signal it is “actively listening to business concerns” as boardrooms prepare for possible tax rises targeting wealth and corporate profits in the November 26 budget.
Last week, Reeves recently told the Guardian that any new tax measures would fall on those with “the broadest shoulders”. With the Office for Budget Responsibility (OBR) reportedly poised to downgrade productivity forecasts and factor in rising borrowing costs, the Chancellor is expected to combine tax rises with restraint on government spending to comply with Labour’s budget rules.
Amid growing concerns about economic stagnation, the Treasury is presenting its deregulation efforts as a productivity driver that will improve efficiency and free up time for investment and growth.
“Reducing administrative burdens allows small businesses to spend less time on paperwork and more time on growth, hiring and innovation,” a Treasury spokesperson said.
The Edgbaston event will also be used to showcase private sector investment. Ministers are expected to announce new commitments of up to £10 billion – but the bulk will come from a previously confirmed £6.5 billion pledge by US property group Welltower to expand care home capacity in the UK following its takeover of Care UK.
Organizations expected include AustralianSuper, HSBC and private equity firm KKR, with Labor seeing the summit as evidence of investor confidence under its leadership.
Reeves will tell delegates: “Our mission is clear: to create the right environment for investment through regulatory reform, mobilize capital through public institutions and support innovation and growth across the UK.”
The Treasury also confirmed that Labor will invest “more millions” in regional growth initiatives to support leveling-up-style projects and attract further private capital.
While business groups are likely to welcome moves to simplify reporting requirements, fears are growing that Labor’s budget shortfall will ultimately drive up employer costs.
With concerns about competitiveness, taxation and regulatory certainty at the forefront, Reeves’ ability to balance “business-friendly” messaging with fiscal tightening will be tested in the coming weeks.
Commenting on the announcement, Scott Gallacher, director of Leicester-based Rowley Turton, said there were many “outdated” regulations.
He continued: “Cutting bureaucracy and making efficiency savings is the standard promise of every political party, regardless of color – but it is rarely kept. Much of what is called ‘bureaucracy’ is actually for public safety, and I suspect that ministers often find that the Sir Humphreys of Whitehall block reforms that could be unnecessary bureaucracy, for fear of future scandals that the same rules were intended to prevent.”
“One area that could really be looked at but is always overlooked is the outdated regulations. These were introduced in the 1990s because of fears that office workers staring at computer monitors for long periods of time could damage their eyesight – a fear that, as far as I know, was completely unfounded.
“Nowadays, virtually everyone uses screens throughout the day – laptops, tablets or phones – both at work and at home. The idea of paid vision tests for all employees who look at screens as part of their job is now completely unnecessary and creates another unnecessary burden on the company.”
