A government taskforce has urged Boris Johnson to shed a range of UK regulations on finance post-Brexit to “unlock” more than £100bn of investment in small businesses and high-growth tech firms.
The Taskforce for Innovation, Growth and Regulatory Reform (TIGGR), led by former Tory leader Sir Iain Duncan Smith, called for changes to allow pension funds to easier invest in high-risk, high-growth firms.
Currently, pension funds are limited by what they can invest in based on a defined contribution charge cap of 0.75 per cent.
The report also calls on the government to pivot from the EU’s Solvency II regulations, which dictates how much capital that insurance firms must hold.
The report said “Solvency II is probably one of the world’s most restrictive prudential regimes” and that they “are a block to investment and have reduced competitiveness”.
The report also calls for “regulations that encourage and enable local authorities to invest their pension fund” in order to fund “their own local economic regeneration”.
“Now that the UK has left the EU it is important to change our approach to regulation which reflects the needs of the UK,” Duncan Smith said.
“This report shows the way ahead with the move to the proportionality principle setting a more flexible and balanced approach to future regulations and changes to existing regulations.
“Importantly this will help new markets develop, as well as releasing significant amounts of capital from existing successful markets to help level up the UK post the pandemic.”