New research from Which? reveals that the majority of UK businesses support robust consumer protection regulations, viewing them as essential to fostering consumer confidence and driving economic growth.
The government’s commitment to boosting economic growth has been a central theme, with Chancellor Rachel Reeves declaring economic recovery as “our national mission.” Regulators such as the Financial Conduct Authority (FCA) have been directed to align their strategies with this growth agenda.
While some industry leaders advocate for deregulation as the solution, claiming excessive red tape stifles growth, the broader business community paints a different picture. According to a Which? survey conducted by YouGov among 1,000 UK businesses, deregulation ranks low on the list of growth barriers. Instead, operational costs, cybersecurity, workforce challenges, and taxation are far greater concerns.
The case for consumer protection
The survey highlights a stark contrast between the rhetoric of deregulation advocates and the reality experienced by most businesses. Around 85% of respondents believe their sector has either the right level of consumer protection regulations or too little. An overwhelming 89% identify at least one benefit to regulation, and 76% point to multiple advantages, such as fostering consumer trust and protecting high-standard businesses from being undercut by less scrupulous competitors.
Interestingly, one-third of businesses (33%) regard consumer protection rules as catalysts for innovation and investment, compared to just 15% who see them as barriers. These findings underscore the positive role regulations play in creating an environment conducive to sustainable business growth.
Regulations driving growth
Recent policy developments demonstrate how well-designed regulations can stimulate economic growth. The new mandatory reimbursement scheme for victims of bank transfer fraud is a case in point. In 2023, £1.2 billion was lost to fraud, undermining consumer confidence and diverting capital from the economy to criminal networks, often overseas. Previously voluntary, the reimbursement framework now covers over 1,500 payment providers, compelling all firms to invest in fraud prevention.
Similarly, the government’s Product Regulation Bill aims to crack down on dangerous goods sold through online marketplaces. By eliminating unfair competition from non-compliant sellers, the bill will create a level playing field, incentivising investment and promoting fair competition.
More Read
Misplaced focus on deregulation
While some voices in the business community, such as the Association of British Insurers, argue for aggressive deregulation to spur growth, the Which? research reveals that these views are far from mainstream. Excessive deregulation risks creating an uneven playing field, leaving consumers exposed to risks and businesses competing against unscrupulous operators.
As HL Mencken once observed, “For every complex problem, there is a solution that is clear, simple, and wrong.” Reckless deregulation falls squarely into this category.
Consumer confidence: A cornerstone of growth
Consumer protection is not merely about safeguarding individuals—it is a fundamental driver of economic growth. When consumers trust the marketplace, they are more likely to spend, explore new products, and engage with innovative services. This dynamic benefits businesses across all sectors, fostering a virtuous cycle of investment and growth.
A balanced approach
The government’s mission to enhance economic growth must avoid being swayed by the minority voices advocating for deregulation at any cost. Instead, policymakers should heed the insights of the wider business community, which recognises the value of strong consumer protections.
As Prime Minister Rishi Sunak outlines the government’s strategy for boosting living standards, it is crucial that he prioritises balanced, evidence-based policies. By supporting fair regulations that drive innovation, protect consumers, and level the competitive playing field, the government can achieve its growth ambitions without compromising on safety or fairness.
In challenging economic times, ensuring consumers are treated fairly and businesses operate within a robust regulatory framework is not just good policy—it is essential for sustainable growth.
