Andrew Griffith: ‘Tell us which City rules to slash’
Look at a UK companies’ annual report today and you will find a lengthy tome more likely to resemble a doorstop than something to provoke interest or excitement from investors.
Much of this is the result of a vast expansion of corporate reporting requirements placed on businesses, starting with Labour’s Companies Act 2006 and pursued relentlessly by governments of all flavours since. Such behaviour by governments costs them little while imposing obligations on the private sector: politicians get to moralise whilst the burden falls elsewhere.
The annual report of Britain’s biggest supermarket, Tesco, fills a trolley at 250 pages with another 60-page volume solely on sustainability. Our largest bank, Barclays comfortably beats that at 536 pages and Astra Zeneca – whose listing is currently on the move to the lighter-regulated US stock market – publishes a total of ten different reports on the sustainability section of its website.
It’s no wonder then that the percentage of UK shares owned by individuals has collapsed from more than half to less than 10 per cent today. In all likelihood, the 1980’s ‘Sid’ simply gave up, crushed under the weight. And perhaps it goes some way to explain why London’s stock exchange listings are falling behind Mexico and Oman.
Unsustainable number of sustainability execs
Companies which should be allowed to focus on providing the growth, investor returns, and jobs on which Britain depends have instead been bogged down with a thicket of red tape that raises costs, wastes senior management time and renders them uncompetitive internationally. Just as with compliance officers in financial services, the number of sustainability directors has grown like Japanese knotweed. Not even just an expensive overhead but an ‘advocate army’ for ever more regulations. At basic salaries of easily £150,000 a pop, it’s nice work if you can get it.
That is why – under new management – we Conservatives are starting to put in place concrete plans to strip away reporting requirements that cost British businesses hundreds of millions a year.
We have identified line by line the detailed regulations that are holding business back and we will repeal them. Those regulators whose missions have not so much crept as run rampage beyond their remit will be reined in. Businesses can get back to business and annual reports will benefit from a new Ozempic-style slimness.
We believe in choice, and those business who wish to report on climate impacts or miscellanea around diversity can of course continue to do so. No doubt many will. But the choice will be their own and it is investors who will decide whether that is the best use of their hard-earned resources.
We will pass a deregulatory Bill to simplify corporate reporting, which will remove non-financial reporting mandates and save business millions in direct and indirect costs. This is only possible as Kemi Badenoch has already committed the Conservatives to replace the Climate Change Act.
We need a ‘second Big Bang’
A benefit will include ensuring that businesses and individuals, like our excellent defence industry, are not debanked on the grounds of spurious and subjective references to ‘ESG’ regulations.
This new commitment, alongside our plans to end uncompetitively high energy costs by extracting the oil and gas resources in the North Sea and scrapping business rates for 250,000 small businesses, are the early steps in a plan that will see a second ‘big bang’ to tackle a failed consensus and unleash Britain’s prosperity. Readers should be reassured there will be more red tape which we will identify and commit to scrapping.
Indeed, ideas of where to wield our chainsaw are welcome. It will not be easy and a sign that it is working will be the howls of protest from vested interests.
For too long Conservatives strayed from being the party of business that we were in the 1980s and 1990s.
We have changed, we are back, and it is time to do right by business again.
Andrew Griffith MP is Shadow Secretary of State of Business