The move is a key component of the plan for growth, that Chancellor, Rachel Reeves, will lay out during her Spring Statement today.
But independent experts have warned that while deregulation can boost the economy, it also raises the risk of catastrophic outcomes, such as a repeat of the 2008 financial crash.
The Financial Conduct Authority (FCA), which is the largest economic regulator, has mostly focused in the past on stopping banks from taking on too much risk and protecting consumers.
Speaking to MPs this week, FCA boss Nikhil Rathi insisted that as well as helping GDP to grow, the body’s reforms would directly benefit those looking to own their own home.
“We have to ask the question, is that a sensible position to be in or do we need to show a little bit more flexibility in that area?”
Government sources said that another measure being prepared by the FCA would give borrowers greater flexibility to renegotiate their mortgage before their existing deal has expired, in order to take advantage of falling interest rates, as well as repaying early without incurring large penalties.
Cutting energy costs
One idea being worked on by Ofgem, with further details set to be announced this year, will make it easier to “reward consumer-led flexibility” – bringing to the market more tariffs which include dramatically lower prices at times when demand is low, such as the middle of the night, or when supply is high because stiff winds or consistent sunshine produce more renewable electricity.
The energy regulator has also hinted at changes to the existing blanket price cap on gas and electricity, promising “more options for consumers to take advantage of different pricing and to flex their usage accordingly”.
He told The i Paper: “As always with these things, the devil is in the detail, but you get a sense from businesses that there are regulations that are holding them back from expanding in the ways they would like.”
He also warned that weakening restrictions on the economy could increase the danger of catastrophic outcomes such as those seen during the global financial crisis.
Ministers accused of inconsistency
Jamie Booth of the Jobs Foundation, which campaigns for policies designed to boost employment, said that making it easier for companies to grow would be a welcome development, adding: “It is something that we would have liked to see from previous governments.”
Booth told The i Paper: “It is all very welcome rhetoric, but especially when it comes to employment it very much goes against their action on things like the Employment Rights Bill. If you are building a wall up on one side of the room, but trying to knock it down from the other side, you are in the same place as before.”
And Reeves told regulators in a meeting: “You know that the number one mission of this Government is to grow the economy. There are a number of things over the last decade or so that have held back growth, and one of them, if we are honest – and you know better than anyone – is the regulatory landscape.”
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