Chancellor's Leeds Reforms to put money in people's pockets
New measures are intended to help drive increased levels of investment among both financial firms and individuals.
The Treasury said the ring-fencing regime – which was brought in after the 2008 financial crisis to separate banks' retail and investment banking activities – will be reformed.
Economic Secretary Emma Reynolds will lead a review into how changes can strike the right balance between growth and stability, including protecting consumers' deposits, it said.
Britain is a global outlier in enforcing ring-fencing, and major banks have been divided over whether the system is necessary to protect savers or is overly burdensome.
The Treasury said it was backing regulatory reforms for mid-sized banks to free up money for lending and investment.
Furthermore, the plans include cutting layers of red tape for businesses in the City.
This will see the UK's Financial Ombudsman Service – which settles complaints between consumers and businesses – modernised and simplified to help create a more predictable system and prevent consumer compensation being delayed.
It will also speed up changes to the senior managers regime, which was also brought in after the 2008 crisis to vet individuals before they are appointed and hold them accountable for problems and risk-taking.
The Government said it will radically streamline the current regime and cut the burden on firms in half.
The Leeds Reforms - named after one of our financial services' hubs and a city I'm proud to represent - will deliver the biggest package of reforms to financial services regulation in a decade.
Kickstarting economic growth and putting more pounds in people's pockets. pic.twitter.com/efN8YEHLPZ — Rachel Reeves (@RachelReevesMP) July 15, 2025
Cuts to City red tape sit alongside efforts to boost the level of investment among individuals.
This includes rolling out 'targeted support' from April next year, whereby banks can alert customers with cash sitting in low-return current accounts about investment opportunities.
Major banks and financial firms including Barclays, Lloyds, Vanguard and Hargreaves Lansdown are backing a new advertising campaign highlighting the benefits of investing.
Risk warnings on investment products could also potentially be watered down as part of a review into possible barriers to investing.
The Government also said it will continue to consider reforms to ISAs and savings to strike the right balance between cash savings and investment.
Ms Reeves was widely expected to leave cash ISAs untouched in the measures announced on Tuesday (July 15), following speculation that she was planning to cut the annual tax-free allowance in a bid to spark more investment instead.
'We are fundamentally reforming the regulatory system, freeing up firms to take risks and to drive growth,' Ms Reeves told finance chiefs when setting out the reforms in Leeds.
Recommended reading:
Adam French, consumer expert at Moneyfactscompare.co.uk, says: 'It is encouraging to see steps being taken to make retail investing a less daunting proposition by plugging the advice gap and empowering firms to give more targeted support while maintaining appropriate safeguards. But it is only part of the puzzle.
'It is also essential that we avoid a return to the low interest rates of the past decade which had a significant and often overlooked side effect: skewing investment priorities by driving capital into property instead of more productive areas of the economy. For the Leeds Reforms to work it must be the case that backing the next generation of British businesses looks safer and more rewarding than property speculation.'
Brian Byrnes, head of personal finance at Moneybox, adds: "It is encouraging to see steps being taken to support first-time buyers. Enabling people to borrow more is not a silver bullet. What first-time buyers truly need is not just the ability to take on more debt, but meaningful, long-term support to help them start saving and investing earlier in life so they can build up that all-important deposit."
Sarah Coles, head of personal finance for Hargreaves Lansdown, also comments: 'It's incredibly positive to see Rachel Reeves take some key steps towards closing the UK's yawning retail investment gap.
'There will be a new era of investment with the advent of new rules allowing companies to offer targeted support to their clients, alongside changes to risk warnings so they actively help retail investors understand their options rather than standing in their way of harnessing the incredible power of investment.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South Wales Argus
an hour ago
- South Wales Argus
Households living near new pylons could get £250 a year off bills for a decade
New transmission cables and pylons are needed across Britain to upgrade ageing electricity networks, connect up new wind and solar farms, nuclear power plants and large scale battery storage, and reinforce the grid to cope with the planned rise in electric heat pumps and car charging in homes. The Government says around twice as much new transmission network infrastructure will be needed by 2030 as has been built in the past decade. But building new pylons and cables through the British countryside has faced a backlash, with homeowners and campaigners concerned about the visual impact and disruption to local areas and beauty spots. The Government has pledged to deliver clean energy by 2030, as part of efforts to boost the economy, cut climate emissions and reduce Britain's exposure to volatile fossil fuel prices. It hopes cash benefits to local people will reduce opposition and planning delays to the infrastructure needed to deliver the clean energy plans. The launch of the consultation comes alongside reforms which place new obligations on energy companies to improve smart meters, and improving connectivity across Scotland and northern England including rolling out 4G services to allow more households to benefit from getting meters installed. The Department of Energy Security and Net Zero is launching a consultation into proposals included in the Planning and Infrastructure Bill to provide payments to households affected by the new developments. Households within 500 metres (a third of a mile) of new or upgraded electricity transmission infrastructure could receive a discount of up to £250 via their electricity bill every year for 10 years, totalling £2,500. The discounts, which would be assigned to the home, and applied to the occupant, could be provided in instalments of £125 every six months. Minister for energy consumers Miatta Fahnbulleh said: 'As we build the infrastructure we need to deliver homegrown, affordable energy, communities must be given a stake. 'That is why we are teaming up with communities hosting new pylons to ensure they receive direct, tangible benefits. 'We are on the side of those who want Britain to get back to what it does best: building for the future, driving innovation and putting communities first.' Labour also accused opposition parties of backing higher energy bills by demanding cables be buried underground rather than attached to pylons. Describing this as 'ideological opposition' to pylons, the party pointed to analysis from the National Energy System Operator suggesting it would cost billions more and could raise household bills by up to £850. A Labour spokesperson said: 'Ideological opposition to vital energy infrastructure projects holds back our economy and pushes bills higher. Yet that is what Reform, the Tories, Lib Dems and Greens are doing when they oppose the infrastructure needed to get energy into people's homes and businesses.' Shadow energy minister Andrew Bowie said it was 'right that communities get some payback for pylons – with this scheme following initiatives started by the last Conservative government'. But he added that the public should 'be in no doubt' that more communities would see pylons built nearby 'as a consequence of Labour's net zero by 2050 zealotry'. Mr Bowie said the Government was now having to 'scramble to try and build the infrastructure needed to support their mad green projects' and urged more investment in nuclear power rather than solar. Proposals to improve smart meters from Ofgem, which are set to be introduced next year, include requirements to cut times for installation appointments and to fix meters that have stopped working in smart mode within 90 days – or provide consumers with automatic compensation. Officials said the measures would help households get lower bills through better management of their energy use and access to more flexible tariffs, such as paying less to use power off-peak or benefiting from free electricity offers when excess power is available on the grid. Charlotte Friel, director of retail pricing and systems at Ofgem, said: 'Millions of consumers rely on their smart meter every day for accurate billing, cheaper tariffs, automatic meter readings and real-time data to help keep track of spending. 'But we know many customers that want a smart meter wait too long to get one installed or face delays on repairs when it stops working – this needs to change. 'These new rules are about setting clear expectations of suppliers, incentivising them to boost smart meter standards, and protecting consumers from poor service if things go wrong.'
Rhyl Journal
an hour ago
- Rhyl Journal
Households living near new pylons could get £250 a year off bills for a decade
New transmission cables and pylons are needed across Britain to upgrade ageing electricity networks, connect up new wind and solar farms, nuclear power plants and large scale battery storage, and reinforce the grid to cope with the planned rise in electric heat pumps and car charging in homes. The Government says around twice as much new transmission network infrastructure will be needed by 2030 as has been built in the past decade. But building new pylons and cables through the British countryside has faced a backlash, with homeowners and campaigners concerned about the visual impact and disruption to local areas and beauty spots. The Government has pledged to deliver clean energy by 2030, as part of efforts to boost the economy, cut climate emissions and reduce Britain's exposure to volatile fossil fuel prices. It hopes cash benefits to local people will reduce opposition and planning delays to the infrastructure needed to deliver the clean energy plans. The launch of the consultation comes alongside reforms which place new obligations on energy companies to improve smart meters, and improving connectivity across Scotland and northern England including rolling out 4G services to allow more households to benefit from getting meters installed. The Department of Energy Security and Net Zero is launching a consultation into proposals included in the Planning and Infrastructure Bill to provide payments to households affected by the new developments. Households within 500 metres (a third of a mile) of new or upgraded electricity transmission infrastructure could receive a discount of up to £250 via their electricity bill every year for 10 years, totalling £2,500. The discounts, which would be assigned to the home, and applied to the occupant, could be provided in instalments of £125 every six months. Minister for energy consumers Miatta Fahnbulleh said: 'As we build the infrastructure we need to deliver homegrown, affordable energy, communities must be given a stake. 'That is why we are teaming up with communities hosting new pylons to ensure they receive direct, tangible benefits. 'We are on the side of those who want Britain to get back to what it does best: building for the future, driving innovation and putting communities first.' Labour also accused opposition parties of backing higher energy bills by demanding cables be buried underground rather than attached to pylons. Describing this as 'ideological opposition' to pylons, the party pointed to analysis from the National Energy System Operator suggesting it would cost billions more and could raise household bills by up to £850. A Labour spokesperson said: 'Ideological opposition to vital energy infrastructure projects holds back our economy and pushes bills higher. Yet that is what Reform, the Tories, Lib Dems and Greens are doing when they oppose the infrastructure needed to get energy into people's homes and businesses.' Shadow energy minister Andrew Bowie said it was 'right that communities get some payback for pylons – with this scheme following initiatives started by the last Conservative government'. But he added that the public should 'be in no doubt' that more communities would see pylons built nearby 'as a consequence of Labour's net zero by 2050 zealotry'. Mr Bowie said the Government was now having to 'scramble to try and build the infrastructure needed to support their mad green projects' and urged more investment in nuclear power rather than solar. Proposals to improve smart meters from Ofgem, which are set to be introduced next year, include requirements to cut times for installation appointments and to fix meters that have stopped working in smart mode within 90 days – or provide consumers with automatic compensation. Officials said the measures would help households get lower bills through better management of their energy use and access to more flexible tariffs, such as paying less to use power off-peak or benefiting from free electricity offers when excess power is available on the grid. Charlotte Friel, director of retail pricing and systems at Ofgem, said: 'Millions of consumers rely on their smart meter every day for accurate billing, cheaper tariffs, automatic meter readings and real-time data to help keep track of spending. 'But we know many customers that want a smart meter wait too long to get one installed or face delays on repairs when it stops working – this needs to change. 'These new rules are about setting clear expectations of suppliers, incentivising them to boost smart meter standards, and protecting consumers from poor service if things go wrong.'
Daily Mail
an hour ago
- Daily Mail
Rachel Reeves' NI tax raid is pushing up the price of food and it could get worse in the autumn, experts warn
Rachel Reeves ' tax raid on businesses is hitting households at the supermarket till, the Bank of England said. Hikes in National Insurance contributions (NICs) and the minimum wage were contributing to shoppers paying more for their food, the Bank said – and warned the situation will likely get worse. Food inflation hit 4.5 per cent in June, higher than economists had forecast in May, and is expected to peak at 5.5 per cent next month. Retail industry leaders warned that grocery inflation will accelerate even further if the Chancellor pushes ahead with tax hikes in the Autumn Budget. And the Bank flagged that Deputy Prime Minister Angela Rayner 's upcoming Workers' Rights Bill had piled more uncertainty on businesses. It came as the Bank's Monetary Policy Committee (MPC) slashed interest rates by 0.25 percentage points to four per cent after a knife-edge five to four vote – which required a second polling. The move is bad news for savers, who will now be paid a lower rate of interest on their nest eggs, but will please mortgage holders. Overall inflation is now expected to hit four per cent later this year, breaching the Bank's previous expectations and double its two per cent target. Bank governor Andrew Bailey said interest rates remain on a 'downward path' but cautioned 'there is genuine uncertainty about the course of that direction'. The Bank's Monetary Policy report, published alongside the rates cut, said that 'domestic labour costs are an important driver of food price inflation' partially due to the 6.7 per cent rise in the National Living Wage. 'Overall labour costs of supermarkets are likely to have been disproportionately affected by the lower threshold at which employers start paying NICs in part because a relatively high proportion of supermarket staff is employed part-time,' the report read. Higher employment costs have so far added 1 to 2 per cent to food prices – and a new packaging tax later this year is expected to pile further pressure on supermarkets. Ms Reeves – visiting Port Talbot in South Wales to announce £143million towards securing decrepit coal tips – said: 'This fifth interest rate cut since the election is welcome news, helping bring down the cost of mortgages and loans for families and businesses.' But Shadow Chancellor Sir Mel Stride told the Daily Mail that Mrs Reeves' choices would make it harder for people to put food on the table, adding: 'Labour's economic mismanagement is turning the screw on hard-working families. Many firms have no choice but to pass costs on to consumers.' Shoppers have already tried to reduce their supermarket spending by buying own-brand products, cheaper cuts of meat and larger value packs, the Bank report said. Grocers have also reported strong sales of 'premium ready meals' as Britons hold back on eating out in a bid to protect cash. As well as hiking prices, businesses have tried to save money by reducing staffing levels through redundancies and imposing hiring freezes, the report found. Bosses said they are looking at replacing workers with automation and artificial intelligence as well as off-shoring jobs. Helen Dickinson, chief executive at the British Retail Consortium (BRC), said government policies would add £7billion to retailer costs this year. 'Food prices have already been climbing steadily, and the BRC has warned this is only the beginning,' she said. 'If the Autumn Budget once again lands on the shoulders of retailers, then it will only serve to fan the flames of food inflation – with poorer families being hit the hardest by the Treasury's decisions.' Ms Dickinson added that retailers' 'ability to absorb further costs is extremely limited'. 'It will be ordinary households who suffer the most,' she said. The Bank's nine-person MPC was split three-ways before taking an unprecedented second vote on interest rates. Four voted for a quarter-point drop, four to keep the status quo and one for a half-point fall. The end result was that five, including Bailey, voted to cut rates while four – including the Bank's chief economist, Huw Pill – wanted to keep borrowing costs on hold. 'This group seems to be particularly concerned about the impact of recent higher inflation rates, particularly for food and fuel, on inflation expectations,' Oxford Economics chief economist Andrew Goodwin said. 'This suggests these members are unlikely to vote for cuts again until they see evidence of inflationary pressures cooling in these categories.'
