We've been writing recently about the UK government's emphasis on growing the economy. The government says the current regulatory landscape is not functioning as effectively as it should and often holds back growth.  Businesses have told the government that regulation can be too complex and duplicative, stifling progress and innovation. There has been an increase in the number and complexity of regulators (despite the last "bonfire of the quangos" under the Coalition government after 2010). Businesses suffer from a lack of certainty and predictability from regulators and regulation and the regulatory approach has become too risk-averse.  

The government goes as far as to say that regulation may be costing 3-4% of GDP, or around £70 billion.

So, what is the government proposing?  The key regulators are meeting Rachel Reeves today (17 March) to discuss plans to reduce red tape.  Against this background, the government proposes to overhaul the regulatory system so that it supports growth, is targeted and proportionate, is transparent and predictable and adapts to keep pace with innovation.  In particular, it has outlined three key actions:

• Tackle complexity and the burden of regulation - the government commits to cut administrative costs for business by 25% by the end of the Parliament.
• Reduce uncertainty across the regulatory system - the government will work with regulators to achieve greater clarity on their roles, approach and processes. This will include making sure regulators have a focused set of duties and clear steers, including a strong focus on investment and growth; and clear processes and published timelines for decisions.
• Challenge and shift excessive risk aversion in the system - the government says that it is vital that regulations and the actions of regulators are proportionate, striking the balance between consumer protection and growth. As a consequence, government departments will carry out reviews with regulators to hold regulators to account for their performance against their statutory duties and strategic steers from government; hold regulators to account for reducing administrative costs; monitor regulators' performance with business through their published KPIs and industry feedback; and improve strategic alignment between Secretaries of State and their regulators.

Consumer law and the CMA

What does this mean for the CMA? This statement relates mainly to competition and digital markets regulation.  However, the government is working with the CMA with the aim of ensuring that the CMA's activities are pacy, predictable and proportionate.  This will involve a finalised growth-focused Strategic Steer to the CMA in the coming weeks, following consultation. 

Sarah Cardell, Chief Executive of the Competition and Markets Authority, emphasised in early March 2025 that the CMA would be taking a proportionate and pragmatic approach to regulating consumer law, and would be targeting the most egregious breaches of consumer law. 

Final thought...

It remains to be seen how this will play out for issues such as pricing and discount claims, fake reviews and greenwashing.

The CMA is champing at the bit to initiate investigations and flex its muscles, now that it has strong powers to cut out the courts and issue judgments on whether a company has breached consumer laws (under the Digital Markets, Competition and Consumers Act 2024), and to issue a fine of up to 10% of annual global turnover! The new powers come into effect on 6 April 2025, but the CMA will need to exercise those powers judiciously to avoid being reined in by the government in its current growth, growth, growth mode!  

One controversial suggestion might be to insist that the CMA continues to funnel its investigations via the courts for the most part, leaving only the most egregious breaches to be tackled more expeditiously (and unilaterally!) by its new ability to decide for itself whether there has been a breach of consumer laws. 

The Emma Mattress case will give us an early indication of whether (as we suspect!) the CMA is interpreting the law in an over-zealous way, and coming up with its own, overly-restrictive approach to various issues such as discount claims - which some would argue doesn't reflect consumer expectations, the law, or the best interests of businesses; nor, for that matter, in the interests of economic growth!