Beautiful Virgin Islands

Tuesday, Jun 24, 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
“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
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
BBC Demands Perplexity AI Immediately Stop Using Its Content
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
×