The vote for Brexit was meant to herald a new era of risk-taking and entrepreneurship outside the stifling confines of EU rules. But even beyond its risk-averse Covid policies, the Government has appeared to go in the opposite direction. Too often, one set of box-ticking regulations has merely been replaced by another. Most of the country’s new Brexit freedoms have gone unused.
A prime example has been the Government’s proposed reforms to audit and corporate governance rules. Following a series of high-profile scandals involving company accounts, there were calls for a tightening of the rules to crack down on fraudulent and lax practice. It is uncontroversial that company accounts should be a faithful reflection of the financial position of a company.
However, the proposals were criticised by corporate leaders as bureaucratic and likely to drive businesses away from the UK, particularly a demand that company directors be made liable for errors in financial statements. This would result, it was feared, in directors shifting their focus away from growing their companies and towards obsessing over processes and internal controls.
It is positive that some of these proposals are set to be dropped or watered down. The economy is in far from good health, and there is the possibility of further disruption should the simmering conflict with the EU erupt into a full-blown trade war.
But even if the economy were booming, this rethink should prompt a wider reassessment of the various rules that curtail the ability of British companies to compete. Even the most well-meaning regulations will come at a cost.