Growth, Risk and the Trade-Off Nobody Wants to Own

The King's Speech on Tuesday included two bills aimed squarely at regulatory burden: the Regulating for Growth Bill and the Competition Reform Bill. The first will impose a statutory mandate on named regulators to prioritise growth and pledges to cut administrative costs for business by 25%. The second will speed up aspects of the CMA’s work. Both are framed not as deregulation but as "modernisation".

They form part of a wider movement. In the United States, an executive order requires federal agencies to repeal ten rules for every new one they make; by the end of 2025, the White House reported agencies had finalised 646 deregulatory actions against only 5 regulatory actions — a ratio of 129-to-1, with DOGE now training AI tools to identify up to 100,000 federal regulations as candidates for the bonfire. In Brussels, ten "Omnibus" simplification packages are projected to cut €11.9 billion in annual administrative costs, with the headline package fundamentally reshaping the EU's corporate sustainability framework.

So is this just another swing of the pendulum?

Not quite. We have seen waves of deregulation before — Reagan in the 1980s, Greenspan's light touch in the 1990s, the pre-crisis international convergence around market-friendly supervision. All of them reduced regulatory intensity. But they still largely operated within a framework in which competing objectives were explicitly recognised: stability, consumer protection, growth, competition. The balance could be struck badly, and often was, but the existence of competing claims was acknowledged. Stability mattered. Consumer protection mattered. Growth mattered. The job was to balance them.

What is different now is the disappearance of the acceptance that there needs to be a balance at all.

The Financial Services and Markets Act 2023 wrote competitiveness and growth into UK regulators' statutory mandates as a "secondary objective". The new Bill goes further for non-financial regulators, such as Natural England, the Environment Agency, and the Health and Safety Executive, allowing ministers to define what growth means in any given context and to issue binding strategic guidance. In the US, the courts and the executive, between them, have set about dismantling much of the administrative state itself. In Brussels, "simplification" extends beyond paperwork to reopening the substance of the post-crisis settlement. The rhetoric varies: Britain talks about the "boot on the neck" of business; America about constitutional governance; Brussels about competitiveness, but the underlying premise is shared. Regulation — not weak demand, productivity, or structural change — is held to be the binding constraint on growth.

This is the move that matters, and it is not really about “more” or “less” regulation. It is about whether the trade-offs involved are being made explicit. Lower capital requirements may create lending capacity, but they also reduce the cushion against losses. Lighter-touch supervision may encourage market entry, but it also gives problems more time to develop before anyone with authority intervenes. Streamlined approvals may get products to market faster, but they also weaken the filter that catches bad ones. These are not slogans. They are the elementary mechanics of regulation, and they do not vanish because politicians find them inconvenient.

The old post-crisis settlement, for all its frustrations, at least acknowledged the impossibility of having everything at once. Stability, consumer protection, competition and growth all mattered, and sometimes they pulled in different directions. The current movement too often implies that the conflict has disappeared: that regulation can be cut, growth unlocked, and resilience preserved without anyone having to say what extra risk is being accepted.

Unowned trade-offs, however, do not disappear. They are absorbed later, by whoever is left holding them when the consequences arrive.

Which sets up the accountability trap. Regulators were criticised before the 2008 crisis for being too restrictive, then criticised after it for failing to prevent what followed. They are now being instructed to prioritise growth. If, in due course, buffers prove too thin, supervision too light, or international coordination too fragmented, they will almost certainly be criticised for failing to prevent the consequences.

It is, of course, a legitimate political choice to accept more risk in exchange for more growth. Democracies are entitled to make that bargain. What is much harder to defend is pretending it has not been made, so that when stress arrives, the people instructed to lighten the touch carry the blame for what follows.

The cycle of crisis–regulation–complacency–deregulation has played out before and will play out again. We cannot abolish it. But we should, at least, be honest about where we are in the cycle and the choices we are making.