The prime minister, chancellor and business secretary have written to 10 regulators, including the Pensions Regulator and the Financial Conduct Authority, asking them to come up with proposals to foster economic growth.

The letters were sent after recent figures showed the economy is still struggling to grow, and have reportedly sparked fears of deregulation. 

A government spokesperson said: “Building on his pledge to get rid of regulation that needlessly holds back investment, last week the prime minister wrote to the country’s main regulators alongside the chancellor and business and trade secretary to call for a new approach to ensure regulation supports growth and investment.” 

  

Each of the regulators been asked to set out "concrete proposals" on how they can go further “to prioritise growth and facilitate investment, supported by government, to significantly boost business confidence, improve the investment climate, and foster sustainable economic growth”, the spokesperson added. 

 

TPR and the FCA are among those that have received the letter and will reply in due course.

The government has centred its pensions review on domestic growth, believing pension fund consolidation and investment in private markets will support this. Some have voiced criticism of these assumptions, including independent consultant John Ralfe, in an opinion piece in the Financial Times published on Friday. In it, Ralfe points to the fiduciary duty of trustees and suggests the government has cherry-picked what it presents as evidence from Canada and Australia.

Nonetheless, TPR is under pressure to show it is aligned with the government’s direction. In September last year, chief executive Nausicaa Delfas said in a speech at the British Private Equity and Venture Capital Association UK Pensions Summit that investment in assets such as private markets “could” generate growth for the UK economy, adding: “But for there to be meaningful, positive changes in investment strategies, there must be greater transparency in industry around performance and costs.” 

 

TPR and the FCA aim to improve transparency on value through a new value for money framework, under which schemes would need to compare themselves with peers and governance bodies would rate their own scheme green, amber or red. 

An FCA spokesperson said: “We look forward to replying to the prime minister’s letter in the new year having already delivered significant measures since summer to support growth. These range from the overhaul of UK listing rules to the reform of the information retail investors receive; from changes to the remuneration regime to proposals to provide better value for money for workplace pension savers; as well as our newly launched AI lab to support innovators, to name but a few.”  

In the next few months, the FCA is also expected to set out proposals for targeted support in pensions, as an alternative to full financial advice, which will be followed by broader proposals for retail investments.
 

 
In addition, it will conclude reforms to secondary capital raising and launch a consultation on a new type of market for private company shares – PISCES – as well as set out next steps on streamlining its rulebook.

Like Labour, previous governments have sought to soften what they saw as the negative impact of regulation on the economy, by giving regulators new objectives. In 2014, when many defined benefit schemes were in deficit, TPR was given a statutory objective of minimising any adverse impact on the sustainable growth of an employer. The FCA and the Prudential Regulation Authority received a secondary objective of supporting international competitiveness and growth of the UK economy in the medium to long term, under the Financial Services and Markets Act 2023.

How do regulators help or hinder economic growth?