MP Iain Duncan Smith leads the charge on radical post-Brexit insurance plans
By Content Director Saxon East
The visceral, beating heart of the Tory party is a belief in supply-side economics - the idea that lower taxes, decreased regulation and free trade can stimulate prosperity.
With the fog of Brexit and the challenging Covid-19 pandemic at last beginning to clear, the Conservatives are gearing up for big change.
Tory grandee Iain Duncan Smith is the ultimate evangelist of supply-side economics and he is leading the charge on ideas that could have a profound impact on insurance.
He leads the task force for innovation, growth and regulatory reform. In a set of explosive recommendations, the group wants to rip up European Union (EU) data protection laws and shake up Solvency II.
They want to gut the GDPR and replace it with a less onerous data protection regime.
Solvency II, on the other hand, is “probably one of the world’s most restrictive” insurance regimes in the world, their group report stated.
Insurance firms should be freed up to hold less capital, with stripped-back reporting requirements.
Duncan Smith believes these moves, among a set of 100 business proposals, will encourage investment, competition and economic growth.
The group is known to have prime minister Boris Johnson’s ear.
In turn, he has talked about reducing the ”thicket of burdensome regulation”.
What lies next
At the moment, this is all talk - but does it have any substance?
Most definitely.
The Tories are unlikely to cut taxes amid the post-pandemic need for state funding.
This will disappoint many Conservative politicians.
Johnson will have to throw them a big bone and that could well be in the form of cutting European red tape.
It will keep his party onside and allow him to flex his post-Brexit muscles to voters.
And, with a thumping majority, Johnson can make these big ideas a reality.
Holding him back will be big business and party moderates - both are fearful of further damaging trade relations with Europe.
We can’t be sure where exactly this ambitious talk will end up, especially as Johnson is prone to flip-flopping.
But one thing is for sure: the post-Brexit debate about the future of this country has truly begun.
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