Singapore says yes in weeks, Britain says maybe in years, and British founders are voting with their wallets
Key Points
- A new House of Lords report says British tech founders are launching in Singapore and the US first because UK regulators are too slow
- Hoxton Farms and MyCardium AI told peers they are running their pilots and product launches abroad rather than in their home market
- Lord Willetts confirmed venture capital funds are diverting investment to Singapore citing UK delays
- UK regulation costs £22.4 billion a year in administrative burden alone, with the government targeting a £5.6 billion cut by the end of the Parliament
- Lords reject the government's paid "fast lane" idea as unfair to smaller companies and startups
British tech founders are running their pilots, taking their products to market and parking their venture capital anywhere but Britain, and a new House of Lords report has finally put the receipts on the table.
The Industry and Regulators Committee’s report, Time is Money: How Regulators Can Support Growth, was published on Tuesday and runs to 56 pages of polite parliamentary horror.
Strip out the footnotes and what you have is a queue of British company founders telling peers, on the record, that the UK is too slow, too expensive and too vague to bother with.
Hoxton Farms, a London startup growing real animal fat in a bioreactor for use in plant-based food, told the Committee its first product is likely to land in Singapore or the US rather than its home market.
Chief of Staff Annie Conde said the company picked those jurisdictions because regulators there give a “very clear timeline of engagement” and a commitment to respond by a specified date. In the UK, she said, those timelines “are often not met.”
MyCardium AI, a British startup using AI to read cardiac MRI scans, said every pilot it is currently running is happening overseas.
Chief Operating Officer Antony Shimmin told peers it is “much more difficult to get an initial pilot implementation or something equivalent to a sandbox up and running here in the UK,” even though MyCardium’s product is built for the NHS it cannot yet sell to.
And then there is the bit that should worry the Treasury most. Lord Willetts, chair of the Regulatory Innovation Office, told the Committee that venture capital funds are pulling the plug entirely.
“We will give up investing in this technology in Britain,” he said investors had told him. “We will put all our money into Singapore because it takes so long.”
The £22.4 billion problem
The Treasury’s own figure puts the cost of British regulation at £22.4 billion a year in administrative burden alone.
The government has pledged to cut that by £5.6 billion by the end of the Parliament, a number the Lords flagged as measuring the wrong thing entirely. The actual cost of complying with British regulation, the people hours and product redesigns and missed launches, is not in the target at all.
Octopus Energy told peers it burns more than 2,500 staff days a year just feeding information to Ofgem, the energy regulator. That is the equivalent of seven full time people doing nothing else.
The receipts stack up sector by sector. John Fingleton, who led the government’s recent nuclear regulatory review, told peers the UK is “the most expensive place in the world to build nuclear power plants,” as well as “a mile of road, a mile of rail, a bridge, a tunnel.” Most of that cost, he said, is interest on the capital sitting there waiting for a regulator to say yes.
The “fast lane” fudge
The government’s headline fix is to let companies pay regulators for faster decisions, the so-called “fast lane.” The Lords were not impressed.
The Committee said the idea would unfairly disadvantage smaller companies and startups with less ability to pay, and might erode public trust in regulatory fairness without fixing the underlying speed problem for anyone else.
The Committee’s chair, Baroness Hayter of Kentish Town, was blunt. “If growth is the government’s priority, it must provide clarity to regulators about its expectation and the political coverage for them to be less risk averse,” she said. “The time to act is now.”
What founders actually want
Speed, mostly. And predictability. Conde from Hoxton Farms said companies do not need shorter timelines so much as timelines that get met.
Lawrence Tallon, Chief Executive of the Medicines and Healthcare products Regulatory Agency, told peers his “number one request” from industry is that the UK just accept regulatory approvals already granted by trusted countries like Canada, so British patients can get medical devices without the same trial running twice in two postcodes.
Until that happens, British founders will keep doing what British founders have already started doing. Booking flights to Changi.
