The Bank of England has become the latest institution to ditch its diversity and inclusion rules in a global pushback against the "liberal corporate agenda".
Regulators are set to axe proposals to enforce 42,000 British businesses to report diversity, equity and inclusion (DEI) data collected on its workers.
Critics of such policies have argued that DEI policies suppress growth - a central aim of Keir Starmer and his Chancellor - and is an insult to meritocracy.
So far, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) said that the policies would have exacerbated problems faced by the regulators.
British organisations have followed the lead of top American companies as they roll back their DEI programmes
PA
The change has followed Donald Trump starting a tidal wave of companies axing their diversity initiatives as he signed an executive order for firms to drop their quotas upon entering the White House in January.
As a result, top companies including Meta, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Citigroup have since rolled back their DEI programmes.
The wave has now reached the shores of Britain as regulators begin to face pressure to water down strict targets to include to hire a certain number of individuals who belong to under-represented minorities.
Rachel Reeves has been a keen advocate of reducing the suffocation of firms with stringent measures so that employers can embrace Labour's plan for growth.
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The Treasury select committee has consistently expressed concern over businesses burdening the impact of the push for diversity and inclusion.
One of those welcoming the regulators' withdrawal of the initiatives is Tory leader Kemi Badenoch, who posted to X shortly after the Bank made the announcement.
She wrote: "The FCA has grudgingly withdrawn this regulation. Thank goodness.
"Giving something the label 'DEI' doesn't mean it's a good idea!
Conservative leader Kemi Badenoch
PA
"This was another example of a quango stepping outside its lane to impose terrible ideas and more burdens on business.
What we need is meritocracy."
In a letter addressed to Dame Meg Hilier, PRA boss Sam Woods wrote: "There is a growing emphasis in our work on reducing regulatory burdens on firms while still delivering our objectives, and adding significant new requirements in this area could be seen as in tension with that approach.
"Given this, we do not currently plan to publish new rules on diversity and inclusion, and do not intend to return to this question until after the substantive implementation of any new legislation in this area."
The plans - which have now been scrapped - firms would have been forced to set annual diversity targets and connect these with the pay of top bosses.
As a result, HR departments would have been set on a mountainous task to collect data on diversity and inclusion within the company and report their findings.
