No doubt big developments are ahead for financial service regulators, changes to roles and responsibilities will be felt by FCA and Prudential Regulation Authority (PRA) regulated firms and also new market entrants. We see clearer regulation and streamlined approach to regulatory oversight and assessment as key positives which support the actions of the HM Treasury paper. Some particular highlights include: Ambition to establish a concierge service to attract overseas financial firms to the UK, this coupled with better FCA early stage support for innovative firms is great news. We’re sure this will help the UK retain its fintech crown and boost confidence in our financial regulators. We often discuss process of securing authorisation with new UK and overseas firms, who find the process opaque and challenging. FCA pledges to issue more 'minded to approve' notices and increase case workers for early stage and high growth firms and its sandboxes will be very well received, we also expect this will improve investor confidence and appetite for early stage fundraising where firms are still seeking authorisation. Oliver Woodhouse, senior associate in our financial services regulatory team.

Data and privacy regulation

HM Treasury’s plan for both the Information Commissioner's Office (ICO) and Ofcom signals a decisive pivot from pure enforcement to proactive, growth-oriented enablement for data-driven businesses: Privacy-preserving advertising: a new sandbox and relaxed ICO consent enforcement where appropriate give businesses a safe space to trial on-device/contextual ad tech without Privacy and Electronic Communications Regulations (PECR) exposure - unlocking investor interest in privacy-enhancing marketing tools. AI: the forthcoming statutory AI Code of Practice, coupled with an expanded regulatory sandbox, lets AI developers validate machine-learning models before launch, creating an audit trail that reassures boards, funders and insurers. Cross-border flows: an upgraded ICO international-transfer risk toolkit, dovetailing with the Data (Use and Access) Bill, looks to drive quicker, cheaper UK-to-US/EU data movements - especially valuable for scale-ups reliant on global cloud and analytics services. Connectivity: Ofcom’s Telecoms Access Review, shared mmWave licences and satellite-to-mobile guidance promise quicker, more flexible routes to nationwide coverage, opening fresh distribution channels for data-heavy services. Support: Ofcom’s new Digital Support Service and the ICO’s scaling up of their SME Data Essentials programme will provide free, regulator-approved playbooks that can substitute for costly external advice. Together these moves signal 'regulation-as-service' - businesses that engage early can accelerate launches while strengthening compliance narratives for boards and investors. David Varney, partner in our technology and data team.

Health and safety regulation

The government’s proposals in relation to health and safety regulation include the following Health and Safety Executive (HSE) pledges: HSE to consult on potential changes to the definitions, occupational diseases and dangerous occurrences reported under the Reporting of Injuries, Diseases and Dangerous Occurrence Regulations 2013 and consider improvements to the reporting process to ensure business can comply in the most efficient way possible. HSE to review the Pressure Systems Safety Regulations 2000 and the Lifting Operations and Lifting Equipment Regulations 1998, and consult to identify and remove unnecessary regulatory burdens and identify potential changes to this legislation to reflect technological advances and reliability of work equipment. HSE and Defra to consult on how international approvals can be recognised to reduce the time and cost to bring chemical products, including biocides, to the GB market. Ian Manners, partner in our business risk and regulation team.

HM Treasury’s policy paper on approach to regulation and supporting growth: what impact will this have on UK sectors?

read time: 3 mins

21.05.25

Ian Manners, Oliver Woodhouse, David Varney, Brian Farrell, Paul Collins, Andrew Roberts

In March 2025, HM Treasury published a new policy paper which set out its approach to supporting the future proofing of UK regulators and different national regulatory frameworks to better support economic growth and investment in the UK.

The new policy paper seeks to address multiple challenges identified across the UK regulatory landscape and will have a lasting impact on a broad range of sectors. The paper focuses on targeted reforms and actions to enhance and streamline existing regulatory frameworks.

During the past few months, the government has been working with regulators to agree measures that will drive growth and investment and can be implemented during the next 12 months. The paper sets out these regulator pledges.

This article outlines the key findings and challenges identified within the paper. Our teams of specialist regulatory lawyers also share how the paper's pledges will affect the financial, data and privacy, health and safety and environment sectors.

Key findings and challenges identified

The HM Treasury's paper recognises that the UK regulatory system has great strengths and underpins almost all areas of the economy. Well designed and implemented regulation is an essential tool to promote growth and when used effectively can effectively address economic, societal and environmental risks, delivering positive outcomes.

It identifies that the current regulatory landscape isn't functioning as effectively as it ought to, impacting growth and private sector investment, noting the UK is falling behind other more agile regulatory systems in overseas jurisdictions.

Three critical actions are identified:

Tackle complexity and burden of regulation.
Reduce uncertainty across our regulatory system.
Challenge and shift excessive risk aversion in the regulatory system.

Ashfords' comment

Overall consideration

Ashfords broadly welcomes the paper’s shift from headline-grabbing 'bonfire of red tape' rhetoric to a more calibrated promise: a 25 per cent cut in administrative costs, not in the substance of protections. By targeting duplicated forms, siloed guidance and inconsistent reporting cycles, HM Treasury sensibly seeks efficiency without repeating the one-in-two-out which undermined the protections afforded to the public, most notoriously in the case of high-rise cladding.

The decision to consolidate overlapping bodies - most notably folding the Payment Systems Regulator into the Financial Conduct Authority (FCA) and creating the Fair Work Agency - should give business a clearer regulatory front door and reduce forum-shopping. Equally, the plan to strip back prescriptive, legacy legislation, for example in health and safety and environmental permitting, aligns with our clients’ call for outcome-based rules that can flex with new technologies.

Two watch-points remain. First, success hinges on regulators embracing a bolder risk appetite; without cultural change the promised 'fast lanes' and sandboxes could still stall in legal caution. Second, streamlining duties must not blur accountabilities: where objectives such as net-zero, growth and consumer protection pull in different directions, ministers will need to give sharper steers to avoid uncertainty.

For organisations planning investment or product launches, the message is clear: engage early with consultations, use pilot schemes, and build data-driven evidence of compliance. Done well, the reforms can deliver a leaner, more predictable regime that rewards responsible innovation - while preserving the public-interest guardrails on which market confidence depends.

Sector specific comment

As mentioned, there are a significant number of regulator pledges that aim to drive growth and investment in the UK, implementable over the next c. 12 months.

No doubt this will drive material regulatory change for businesses in a very broad range of sectors, our teams of specialist regulatory lawyers are on hand to support with this, and have shared some thoughts on the paper’s findings below, relevant to their different areas of expertise.

How will the HM Treasury’s policy paper affect different sectors?

Environmental regulation, planning and water

The government proposes to remove some of the complexity around environmental permitting, including streamlining the nationally significant infrastructure projects (NSIPs) process by simplifying the environmental permitting and licence requirements for low-risk activities within the planning process to simplify the consent requirements for developers.

The government is currently consulting on reforms to the environmental permitting legislation that will enable environmental regulators to be more agile in making permitting decisions, whereby low-risk activities should be exempt from environmental permits. This is intended to encourage innovation and investment, and allow regulators to prioritise high-impact, high-priority areas, including low-carbon infrastructure,

In supporting the simplification of environmental regulation, the government is launching a number of initiatives, including:

Launching the Environment Agency’s new priority tracked service, which will allow developers to work with a dedicated team on their permits and track progress.
Streamlining delivery of major water projects. Department for Environment, Food and Rural Affairs (Defra) will amend the Water Industries (Specified Infrastructure Projects) Regulations 2013 to allow major water projects to be delivered more quickly and with better value to billpayers.

To ensure the planning system delivers growth, the Ministry of Housing, Communities and Local Government will reform the system of statutory consultees. This will include:

Making clear the statutory consultees should be focussed on growth.
Making clear that local planning authorities should only consult statutory consultees where really necessary.
Allowing statutory consultees to recovers costs for advice.

One of the pledges the Environment Agency has made to drive growth and investment that is of particular interest is to improve its regulatory transparency and consistency to help businesses it regulates under the Environment Agency decision making and reduce uncertainty. Starting in spring 2025, Compliance Assessment Reports (CARs) for water quality and Environmental Permitting Regulations (EPR) permits will be published online, providing access to records when the Environment Agency visit operators to check they are complying with their own permit.

Paul Collins, senior associate in our business risk and regulation team and Brian Farrell, partner in our energy and resource management team.

Key next steps

If the key goals of the HM Treasury paper are implemented successfully in the UK government’s current parliament, one would hope to see an overhauled UK regulatory system, which keeps pace with innovation and further enhances global regulatory reputation, whilst maintaining a more proportionate and targeted approach to risk management.

The Ashfords team remain on hand to support businesses to manage regulatory change. If you have any questions on the paper and how these developments may impact your day-to-day operations, please get in touch with Ian Manners, partner and business risk & regulation lead.

Contact Ian