Beautiful Virgin Islands

Monday, Jun 30, 2025

To make Britain competitive globally, we must strip away regulatory red tape

To make Britain competitive globally, we must strip away regulatory red tape

Last month, the UK’s Competition and Markets Authority (CMA) made a ruling which blocked the merger of the two British crowdfunding sites Seedrs and Crowdcube. This was wrong for a slew of reasons, not the least because Seedrs and Crowdcube are both tiny companies that should be below the regulatory radar.

Both companies are currently loss-making and may need the scale that a merger would bring to remain viable. More than competing with each other, they compete in a huge and highly competitive market for start-up funding that includes seed funds, bank finance, angel syndicates and corporate venture funds. But mostly it was wrong because they, like the majority of digital businesses, compete in an increasingly global market.

Look at PayPal from the US, Sweden’s Klarna, or the UK’s TransferWise. In each case they started by serving their domestic market and then expanded to compete internationally. This is often the way with digital offerings.

The UK has a strong position in building innovative digital businesses, and is particularly strong in financial technology (fintech). For Britain to maintain this position, which is more important than ever as we seek to mitigate the impact of Brexit, we need a business and regulatory environment that supports the growth of our technology innovators.

At the forefront of this needs to be reining in excessive regulatory interventions in a range of areas. The recent review of UK competition policy by Conservative MP John Penrose lays the foundation for this. The report recognised the cumbersome red tape which slows businesses down and increases transaction costs and suggests a “better regulation” regime”. It proposes a “one-in-two-out” strategy for ministers attempting to introduce new rules. This must also translate into a clearer set of rules from sector regulators, so innovators can operate without risk of retrospective rule making and enforcement actions in the future.

In order to foster competitiveness after Brexit, predictability will be key. This will require the CMA to have a transparent and speedy process, with decisions made in weeks rather than months or years. Predictability means rulings based on the risk of consumer detriment from the combination of the companies’ current operations, not some conjecture about what they might do in the future.

The CMA review of Amazon’s proposed 16% stake in Deliveroo in 2019 hinged on whether Amazon might, in the future, enter the UK takeaway delivery market. Such decisions cast the CMA as soothsayers. Many big tech companies could, conceivably, enter many, many markets. To know that almost any such transaction could be thwarted based on regulator crystal ball gazing makes any UK-based merger highly uncertain and therefore less attractive.

Britain’s mergers and acquisitions review process must also recognise the international nature of competition in digital markets. With its focus on domestic competition, the CMA is far more likely to block the combination of two UK businesses than the sale of a UK business to an acquirer from overseas. Of course we need to protect consumers from the creation of true monopolies, but we must also recognise that competition is increasingly global, and have an eye to UK competitiveness. If it is far easier for our tech companies to sell to overseas buyers than to merge domestically, then our best digital IP will end up in foreign ownership and we will fail to create UK-based scale players that can compete on a global level. Our economy will be all the poorer as a result.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
×