Chancellor Promises to Export City of London Deregulation Drive Nationwide

In a clarion call to Britain’s policymakers and business leaders, Chancellor Rachel Reeves has pledged to export her successful City of London red tape reduction programme across the wider economy. Writing in the Financial Times this week, Reeves argued that Britain’s overly cautious regulatory framework has placed unnecessary burdens on firms, stifled innovation and hindered growth at a time when agile competitors are seizing market share globally.

Reeves’s red tape purge, initially launched as part of her post-Mansion House agenda to streamline finance-sector regulations, has delivered notable relief to banks, asset managers and fintech start-ups operating in the Square Mile. However, she warned that its benefits must no longer be confined to London’s financial district. “An excessive safety‑first approach is not seen in any of our global competitors,” Reeves wrote. “It is bad for businesses, bad for growth and bad for working people.”

The Mansion House speech, delivered on July 10 in front of the Lord Mayor and senior City figures, outlined a four‑point plan to tackle what Reeves described as a “culture of caution” that pervades Britain’s rulebooks. First, she will compel regulators to adopt a “think small first” principle, ensuring that new rules are proportionate to the size and risk profile of firms. Second, she plans an annual “sunset review” of existing regulations, targeting outdated or duplicative requirements for repeal.

Her third proposal calls for a single, digital gateway for compliance, replacing a labyrinth of reporting portals with an integrated platform that reduces duplication and saves time. Finally, Reeves signalled a tougher approach to regulators themselves: failure to meet reduction targets could result in parliamentary scrutiny and, in extreme cases, sanctions or budgetary penalties. “We will hold our watchdogs to the same standard of efficiency we expect of our businesses,” she declared.

Businesses outside the finance hub have welcomed Reeves’s ambition, but cautioned that translating her City success story to sectors such as manufacturing, construction and retail will require careful calibration. Mary Mahoney, chief executive of the Federation of Small Businesses, said: “Our members spend on average 16 days a year dealing with bureaucracy. A national roll‑out of these reforms could unlock significant productivity gains, especially for micro‑ and medium‑sized enterprises.”

Manufacturers have long lamented labyrinthine health and safety protocols, environmental assessments and labour regulations that drive up costs and cause delays. “We fully support reducing ‘gold‑plated’ standards where they serve no public purpose,” said James Willis, operations director at a Midlands automotive parts firm. “But we must retain strong safeguards on workers’ rights and environmental protection. The challenge is striking the right balance.”

Opposition voices have been more sceptical. The Conservative Party accused Reeves of “raiding regulatory safeguards” and warned that weaker oversight could expose consumers and workers to fresh dangers. Shadow Business Secretary Laura Saunders said: “Red tape often exists for good reason: to prevent unsafe products, protect employee rights, and guard the environment. Deregulation can’t be an excuse for letting big business run rampant.”

Reeves countered that her approach is not about dismantling standards, but eliminating needless duplication. She pointed to the EU’s new digital single rulebook, which allows member states to tailor application for small enterprises. “It is simply common sense to ensure that regulation achieves its objectives without smothering the very economic activity it is meant to support,” she argued.

The international context underscores the stakes. Nations such as Germany, the United States and Singapore have been praised for regulatory agility, using fast‑track approvals and rolling‑review processes to foster innovation in areas from green technology to artificial intelligence. In contrast, UK start‑ups frequently cite lengthy approval timelines and legal uncertainties as barriers to scaling.

Reeves’s initiatives will be overseen by a newly appointed Deregulation Taskforce, chaired jointly by the Treasury and the Department for Business and Trade. The taskforce will consult industry stakeholders through quarterly roundtables and publish regular scorecards tracking progress. Reeves has also signalled potential collaboration with devolved administrations to ensure that reforms reflect regional needs.

Analysts say that the success of the programme will depend heavily on execution and political will. “It’s one thing to announce deregulation goals, it’s another to change deeply entrenched bureaucratic cultures,” noted Sebastien Lucas at Capital Economics. He added that the Treasury will need to monitor regulators closely and ensure that resource constraints do not hamper their ability to deliver core functions.

For Reeves, the drive represents a broader vision of economic renewal: one that empowers businesses to innovate, creates new jobs and boosts competitiveness on the world stage. With the next general election on the horizon, she will seek to position Labour as the party of pro‑business reform, challenging the conventional narrative that regulation and growth are mutually exclusive.

As the red tape revolution prepares to leave the City’s borders, all eyes will be on the Treasury’s first sunsetting review this autumn. If Reeves’s blueprint delivers tangible relief without eroding public protections, it could mark a defining moment in Britain’s post‑Brexit economic journey. If not, the chancellor may find herself fighting to salvage support from both business leaders and sceptical critics alike.