Go boldly to cut red tape after Brexit, UK lawmakers' report urges

© Reuters. FILE PHOTO: Buildings are seen in the Canary Wharf business district, amid the outbreak of the coronavirus disease (COVID-19), in London, Britain January 27, 2021. REUTERS/Peter Cziborra

By Huw Jones

LONDON (Reuters) -Trialling a digital pound, encouraging driverless cars and building on COVID vaccine success by cutting red tape would boost Britain’s growth after Brexit, a report commissioned by Prime Minister Boris Johnson recommended on Tuesday.

The report, produced by a taskforce of Conservative lawmakers, chaired by pro-Brexit lawmaker Iain Duncan Smith, set out a “bold new UK regulatory framework”, and reforms for key sectors and how they could be implemented.

Rules should be as simple, agile and proportionate as possible, the 130-page report said, with, for example, financial services needing to be “untangled” from European Union rules to help to rebuild the economy after COVID and also help to meet commitments to cut carbon emissions.

The report’s recommendations include allowing pension schemes to invest in companies that cut carbon emissions.

The prime minister welcomed the report’s findings, saying Britain must cut back on what he called a “thicket of burdensome and restrictive regulation” that has grown around business in the last half a century.

“Your bold proposals provide a valuable template for this, illustrating the sheer level of ambitious thinking needed to usher in a new golden age of growth and innovation right across the UK,” Johnson said.

In financial services, it backs loosening limits on the size of a position that can be held in commodity derivatives to make it easier to develop new products.

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Rules for setting margins or cash deposited at a clearing house to support trades should be more flexible, and the burden of anti-money laundering rules on fintechs reduced.

“Onerous” rules inherited from the EU that require market participants to report data on trades to regulators should be softened.

Plans to develop a digital pound and launch a pilot within 12 to 18 months should be accelerated, the report said.

Other recommendations include changes to the energy grid and market to make greater use of low-carbon technology, and an update of agriculture rules.

Britain has been successful in helping to develop and roll out a vaccine against COVID-19 and the report recommends scrapping pharma industry rules inherited from the EU and starting afresh to “restore” global UK leadership in clinical trials.

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