Regulatory Approval for New Products and Services

Question

Asked by

To ask His Majesty’s Government how they plan to support British innovators by tackling delays in getting regulatory approval for new products and services.

In the Autumn Statement, we set out proposals to improve the performance and accountability of regulators through reforms to the growth duty. These include asking regulators to set targets on regulatory approvals and monitoring their performance against those targets, alongside offering a fast-track service for regulatory approvals in certain circumstances. Through this, we are committed to working with regulators to ensure that we offer a world-class service to British businesses to support economic growth and innovation.

My Lords, I thank the Minister for that reply, but does he accept that British innovators often face a mountain of red tape just to get started? In some cases, it can mean getting approval from up to 11 different regulators. For example, the British Healthcare Trades Association reports that medical equipment suppliers face a complex array of interrelated laws and regulations to get their products to market in the UK, with 95% of them calling for greater regulatory certainty. Those costs and delays are dissuading many from creating new products, which in turn is reflected in patient care and outcomes. So what are the Government doing to address these complexities? Does the Minister support our proposal for a new regulatory innovation office to hold the regulators to account for any delays? What action is being taken to speed up decisions in granting university research funding so that innovators can play their full part in driving up economic growth?

I am grateful to the noble Baroness for her points. This is clearly a topic of much broader debate, and I am very grateful to have been given the regulatory reform agenda in my portfolio. We have three core priorities. The first is to minimise the regulatory burden and to future-proof regulations, which means looking at the current regulatory stock and seeing what we can do to make it more effective. The second is to work out the mechanisms that will allows us to better understand and establish how we can measure the cost of regulation on business when it comes through Chambers such as this. The third is to work with regulators to get them to promote the duty of growth and to look at regulation as a service, rather than simply a block, as we do sometimes.

I will answer two other quick points on the health side. My noble friend Lord O’Shaughnessy wrote an excellent report on getting clinical trials to operate more effectively; the Government have accepted most of those points. On innovation, my noble friend Lord Camrose pointed out to me, on the way in, the extraordinary number of initiatives he has taken with the various Bills we are bringing through and the co-ordinating function of the DRCF, which means that we are one of the most innovative regulatory environments in the world for AI and new tech.

My Lords, we are grateful to the noble Baroness for bringing up the issue of innovation, which I know the Minister also considers to be very important. Last week, I spoke with representatives of the highly innovative UK tech industry. Worryingly, they reported that tech start-ups that should be starting up in the UK are being very effectively lured to France. I think the Minister will agree with me that this needs to be nipped in the bud, so can he undertake to dispatch his department to find out what France is doing and how it is getting some success here and to make sure that the UK is doing at least as well if not better?

I am grateful to the noble Lord for his comments and am always stung by comparisons with our near and dear neighbour. But I can reassure him that our global investment summit raised over twice as much in terms of commitments as the one in Versailles. There are three trillion-dollar tech economies in the world: one is the United States, one is China and one is the UK.

Complacent.

We should celebrate the fact that we are raising more money for tech in this country than Germany, France, Spain and Italy combined in many sectors—but we are not complacent. I totally accept the need to ensure that organisations such as UKRI are given the firepower that we have given it to ensure that we can provide funding for these businesses. I personally take this very seriously and would be delighted to have further conversations with the noble Lord on how we can ensure that every tech company in the world sees this country as their international HQ.

My Lords, will the Minister comment on the fact that, during Covid, we were able to get very swift licences for new medical products, including an innovative external ventilator that was developed with UCL? Some of those ventilators are still left, and my understanding is that they are to be destroyed because they no longer meet either need or requirements—but it also seems to be about getting the licence re-evaluated because it was produced as an emergency. Surely we could be much quicker, and will the Minister comment on how we could fast-track, in particular, medical devices?

I am grateful to the noble Baroness for those comments. She is absolutely right: we can never move too fast as long as we can do it in a safe and appropriate way. My noble friend Lord O’Shaughnessy’s report was enormously helpful in driving change, particularly for clinical trials. We want to ensure we are the number one place for trials in Europe, if not the world, because it benefits the patients, the NHS and our economy. I will just touch on some of the reviews that have recently been undertaken; it is worth highlighting them and engaging with noble Lords on them. There were reports on digital technologies—that was published last year—on green industries, on life sciences, on the creative industries, on advanced manufacturing and, fundamentally, there was a cross-cutting report on how we can have pro-innovation policies.

I also refer back to my fundamental role, which is to bring smarter regulation into the Government. I ask Peers on all sides of the House to please come to me with their ideas. Let this not be Oral Questions but oral suggestions on how we can reduce regulatory burdens on business and boost our economy.

My Lords, in that spirit, I refer to my interest in the register. The Minister said quite clearly that the Government are committed to regulating for growth and innovation. Will he also ensure that regulators have at the forefront of what they are doing ensuring that those they regulate are delivering services, facilities or products that are properly resilient and prepared for the various threats that as a nation we face?

I completely agree with the noble Lord’s point and I absolutely take it to heart. The point is to see regulation as a service, where we have to take the appropriate action to ensure that the investors, the companies, the consumer and the broader environment of the body politic can work in harmony. It is that balance that we seek to achieve by promoting the growth agenda. Importantly, that is not at the expense of the protection of the consumer or of our overall habitats and environments. It is essential that people realise that we are looking for positive economic growth through better regulation, rather than derogating from our responsibility to ensure that regulation is truly to ensure that the consumer market functions properly.

Is my noble friend aware that, at this point in time, the very successful mutual movement—in other words, building societies, friendly societies, et cetera—is facing difficulties for growth, particularly in the raising of future capital, from the existing regulatory regime? Given the offer that my noble friend made a few seconds ago, would he be prepared to meet the leaders of that movement to go through where the challenges for the movement are in order that it may grow even faster than it has been growing recently?

I am grateful to my noble friend for that point. I would be delighted to meet with any stakeholders he suggests are useful. The mutual movement is an ancient and important principle in our financial services industry in this country. It provides an incredibly valuable service and of course I will do anything I can to support it.

My Lords, a couple of years or so ago, the European Affairs Committee published a report on the EU-UK financial services relationship. One of our key suggestions was that UK regulators should be responsive, consistent and proportionate—three words that we have not yet heard from the Minister. Does he agree that being responsive, consistent and proportionate are three very important things that all regulators should be aware of?

I am grateful for those important words and I absolutely agree. There are issues in ensuring that regulators’ mandates are properly focused. It is important to get a balance between, for example, investment, growth and the other regulator duties. I look forward very much to working with the regulators when we assess the responses from the consultation that is currently being undertaken—some were completed last week—to bring together a suite of solutions to ensure that we can continue to grow our economy and regulate it properly.

Let me just add that our regulators are some of the best in the world. From travelling around the world, I know that a number of jurisdictions literally cut and paste our regulatory texts so that they can copy what we do because they admire it so much. That does not mean we should be complacent, but it does ensure that we should focus very much on the opportunities that the growth agenda will give us.

My Lords, perhaps I might urge the Minister to think about regulatory approval in a different way, by reminding him that Warren Buffett said:

“Derivatives are financial weapons of mass destruction”.

We have seen so many financial products mis-sold in this country. Can I urge the Minister to ensure that regulators road-test all financial products before they are unleashed on the unsuspecting public?

I am grateful for that comment; of course, I would contact the Treasury about it, since that is its specific focus. I totally agree that we need to have trust in financial markets for them to function properly. That also entails significant responsibilities towards the consumer.

My Lords, what my noble friend the Minister has said is extremely encouraging and very much to be welcomed, particularly on the strong track record on investment into this country and small tech start-ups. However, I draw his attention to large tech companies, where the picture is slightly more mixed. Is he aware that the London Stock Exchange and the FTSE 100 are having great difficulty in attracting internationally mobile big tech companies for listing and, indeed, have recently lost a number of listings to New York? Is this not something that the Government ought urgently to have a look at?

It is always intimidating for a junior Minister to receive questions from someone as significant as my noble friend. He is absolutely right: over the past year, the Government have been working extremely hard, through the Edinburgh reforms and the Mansion House compact, to ensure that domestic pension fund money flows back into the markets. My noble friend is also completely right that we need to look extremely closely at how the LSE functions in order to attract the new type of modern company that lists in a different way. Work is ongoing at the moment; it is a complete priority. On venture capital and private equity, I am glad to say that, at the new start-up level, the funding is doing extremely well. We are having a very strong year—perhaps one of the best years we have ever had—in those new start-up and investment areas in this country. We should celebrate that. We are too down on ourselves; it is time that we start rejoicing in our position as one of the key venture capital hubs not just in Europe but in the whole world.