Latest news with #LeedsReforms
Reuters
3 hours ago
- Business
- Reuters
Breakingviews - UK's deregulation drive fosters wrong type of risk
LONDON, July 16 (Reuters Breakingviews) - Rachel Reeves reckons the City of London needs more dynamism. Britain's finance minister is probably right. But some of her latest reforms, including weaker rules for banks, may raise the risk of economic harm. Reeves's latest bundle of policy proposals – dubbed the Leeds Reforms after the British city where she unveiled them – follows a similar speech last year at the Mansion House dinner, the preferred forum for the chancellor to flaunt her pro-finance credentials. On Tuesday evening she told, opens new tab City grandees that regulation was a 'boot on the neck' of growth, and talked up a range of measures to cut red tape on the financial sector, which accounts for 9% of UK economic activity. Many of the planned reforms are sensible. Watchdogs like the Financial Conduct Authority (FCA) and the Bank of England's Prudential Regulation Authority (PRA) will face, opens new tab clear deadlines on how quickly to approve new firms and senior managers. Separately, banks may be allowed to alert customers to the fact that money in their cash accounts could be earning higher returns in the stock market, a practice stamped out after the 2008 crisis. Reeves is also considering, opens new tab further changes to tax-free savings accounts, which could in theory include nudging more people into equities. The common thread is that Britain's weighty edifice of rules and regulations has left too much money sitting on the sidelines, harming both savers and the competitiveness of UK capital markets. It's a broadly correct diagnosis. A recent Aberdeen report found, opens new tab that Brits had the smallest percentage of their wealth in equities and mutual funds among the Group of Seven wealthy countries. Other elements of Reeves's reform push, however, could create the wrong type of risk. She touted bank supervisors' decision to raise the balance sheet threshold beyond which lenders must issue loss-absorbing debt to protect depositors to 40 billion pounds ($54 billion), from 25 billion pounds. That's odd since the failure of U.S. lender Silicon Valley Bank in 2023 arguably demonstrated the dangers of not having such a buffer. Supervisors are also extending the implementation deadlines for other global bank-capital tweaks and will report back to Reeves on broader levels of equity among lenders. She wants to ensure that the overall framework strikes the 'optimal balance to deliver resilience, growth and competitiveness'. It's welcome that Reeves recognises Britain's financial sector competes for international business, rather than just existing to funnel capital to UK startups and small businesses. Nevertheless, her deregulatory drive could be dangerous. The surest way to protect economic growth is to make sure systemic banks don't get into trouble. A robust and stable financial system allows credit to keep flowing as the rest of the economy waxes and wanes. Meanwhile, the 42-million-pound fine the FCA slapped on Barclays on Wednesday is a reminder that money laundering controls can be worryingly lax, even at the largest UK banks. Cutting red tape is one thing, but tearing pages out of the bank-regulation rulebook risks going too far. Follow Liam Proud on Bluesky, opens new tab and LinkedIn, opens new tab.
South Wales Guardian
20 hours ago
- Business
- South Wales Guardian
Britain cannot grow without ‘fighting fit' finance sector, Rachel Reeves says
Ms Reeves, delivering her annual Mansion House speech to the financial services sector, said changes were needed for the UK to stay competitive in a more uncertain global economy. 'Today, I have placed financial services at the heart of the Government's growth mission, recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving,' she told the attendees. She said the Government was delivering on its pledge, made at last year's Mansion House speech, to 'regulate for growth and not just for risk'. The Treasury announced a package of reforms on Tuesday aimed at attracting more investment to the UK, and among individual consumers, to help grow the economy. Ms Reeves said this involves 'rolling back regulation that has gone too far in seeking to eliminate risk', with plans to cut red tape in the City and reform banking rules including the ring-fencing regime. The UK is currently an outlier in forcing banks to separate their retail and investment banking activities, so reforms are hoped to make Britain more competitive globally. Ms Reeves also highlighted efforts to boost retail investment which she said is currently presented 'in a negative light, quick to warn people of the risks without giving proper weight to the benefits'. Plans include potentially changing the language of risk warnings on investment products to encourage more people, particularly women, to take the leap. 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. — Rachel Reeves (@RachelReevesMP) July 15, 2025 Furthermore, the Chancellor said new powers to mandate pension funds to invest in UK assets were 'sending a clear signal' that the Government and industry want to deliver higher returns for savers and more investment for the economy. 'But I am confident that I will not need to use that power because firms see the urgency and importance of this as clearly as I do,' she said. The 'Leeds reforms', unveiled in the West Yorkshire city, are set to be the biggest set of reforms to financial services for more than a decade, according to the Government. But the Chancellor concluded her speech by saying: 'As I look ahead, it is clear that we must do more. 'In too many areas, regulation still acts as a boot on the neck of businesses, choking off the enterprise and innovation that is the lifeblood of growth. 'Regulators in other sectors must take up the call I make this evening not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country.'
Yahoo
20 hours ago
- Business
- Yahoo
Red tape is ‘boot on the neck of businesses', says Reeves
Red tape is a 'boot on the neck of businesses' and risks undermining the UK's dash for growth, Rachel Reeves has said. In a major City speech, the Chancellor on Tuesday night urged Britain's regulators to ditch their 'excessive caution' as she rewrote rules for banks and building societies to help more people on to the housing ladder, deliver better returns for savers and boost economic growth. She set out the plans in an address to City leaders and financial watchdogs at London's Mansion House alongside Andrew Bailey, the Bank of England Governor. It marked her first major speech since the Government's climbdown on welfare reforms, which have left the Chancellor scrambling to find billions of pounds to balance her Budget. Ms Reeves has been left with a choice of either raising taxes, attempting to cut spending again or relaxing her fiscal rules to allow her to borrow more. On Tuesday night she insisted there would be no change to the Government's borrowing policy. She said: 'The Prime Minister, this Government and I remain committed to our non-negotiable rules.' Instead, she set out plans to unshackle Britain's financial sector in bid to boost both growth and tax receipts. 'In too many areas, regulation still acts as a boot on the neck of businesses choking off the enterprise and innovation that is the lifeblood of growth,' she said. 'Regulators in other sectors must take up the call I make this evening not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country.' Ms Reeves said slashing red tape would create a 'ripple effect' across the economy 'putting pounds in the pockets of working people'. As part of the offensive, the Treasury has unveiled a string of City reforms targeting consumers, banks, insurers and international investors in an attempt to revive Britain's sluggish economy. The measures, called the Leeds Reforms, will rewrite mortgage rules to make it easier for people to borrow up to 4.5 times their income when buying a house, as well as making it easier to remortgage. Banks will also be allowed to start pitching stocks and bonds to ordinary investors through a new regime known as 'targeted support', having been banned from doing so in the aftermath of the financial crisis. Major financial institutions such as Barclays and NatWest are also backing an advertising campaign with echoes of the 'Tell Sid' British Gas scheme in the 1980s to urge people to buy shares. Despite pledging to rip up red tape, Ms Reeves has been accused of excessive Government meddling after handing herself the power to force pension funds to invest in the UK. Charlie Nunn, the chief executive of Lloyds Bank, recently compared the scheme to capital controls in Communist China, while Mr Bailey has also spoken out against the powers. Ms Reeves downplayed the significance of the new regime, saying she was 'confident that I will not need to use that power because firms see the urgency and importance of this as clearly as I do'. Since taking over as Chancellor, Ms Reeves has proved to be one of the most interventionist politicians to hold the post since Gordon Brown took power in 1997. Earlier this year Ms Reeves wrote to the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and the Competition and Markets Authority (CMA) along with a number of other watchdogs asking them for a list of five things to boost growth. In a sign of her intent, the Chancellor effectively removed Marcus Bokkerink – the chairman of the CMA – after losing faith in his leadership. As part of her reform package, the Financial Ombudsman Service (FOS) will also have a number of its powers removed amid fears that its rulings were creating onerous new rules for the City through the backdoor. Ms Reeves said the changes would return the FOS to its 'original purpose as a simple, impartial arbitration service and ensure that it no longer acts as a quasi-regulator'. The Chancellor's attempt to unshackle the City echoes similar measures announced by her predecessors. Jeremy Hunt set out his own package of Mansion House reforms in 2023, while Rishi Sunak set out a 'road map' to make Britain a world leader in green finance in 2021. Past reforms have yet to meaningfully change the country's growth trajectory. Karim Haji, head of financial services at KPMG, said of the reform package: 'The critical test will be in their execution and how quickly these proposals can translate into real, measurable benefits for firms, investors and consumers.' Ashok Gupta, of New Capital Consensus, a campaign group, said: 'The Chancellor's first shot at fixing the system is in the right direction, but the ball has barely landed on the fairway. It needs to swing harder and with greater purpose with its next shot, or it's game over. 'The future of the UK economy and Labour's re-election hopes depends on getting this right.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
North Wales Chronicle
21 hours ago
- Business
- North Wales Chronicle
Britain cannot grow without ‘fighting fit' finance sector, Rachel Reeves says
Ms Reeves, delivering her annual Mansion House speech to the financial services sector, said changes were needed for the UK to stay competitive in a more uncertain global economy. 'Today, I have placed financial services at the heart of the Government's growth mission, recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving,' she told the attendees. She said the Government was delivering on its pledge, made at last year's Mansion House speech, to 'regulate for growth and not just for risk'. The Treasury announced a package of reforms on Tuesday aimed at attracting more investment to the UK, and among individual consumers, to help grow the economy. Ms Reeves said this involves 'rolling back regulation that has gone too far in seeking to eliminate risk', with plans to cut red tape in the City and reform banking rules including the ring-fencing regime. The UK is currently an outlier in forcing banks to separate their retail and investment banking activities, so reforms are hoped to make Britain more competitive globally. Ms Reeves also highlighted efforts to boost retail investment which she said is currently presented 'in a negative light, quick to warn people of the risks without giving proper weight to the benefits'. Plans include potentially changing the language of risk warnings on investment products to encourage more people, particularly women, to take the leap. 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. — Rachel Reeves (@RachelReevesMP) July 15, 2025 Furthermore, the Chancellor said new powers to mandate pension funds to invest in UK assets were 'sending a clear signal' that the Government and industry want to deliver higher returns for savers and more investment for the economy. 'But I am confident that I will not need to use that power because firms see the urgency and importance of this as clearly as I do,' she said. The 'Leeds reforms', unveiled in the West Yorkshire city, are set to be the biggest set of reforms to financial services for more than a decade, according to the Government. But the Chancellor concluded her speech by saying: 'As I look ahead, it is clear that we must do more. 'In too many areas, regulation still acts as a boot on the neck of businesses, choking off the enterprise and innovation that is the lifeblood of growth. 'Regulators in other sectors must take up the call I make this evening not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country.'
Rhyl Journal
21 hours ago
- Business
- Rhyl Journal
Britain cannot grow without ‘fighting fit' finance sector, Rachel Reeves says
Ms Reeves, delivering her annual Mansion House speech to the financial services sector, said changes were needed for the UK to stay competitive in a more uncertain global economy. 'Today, I have placed financial services at the heart of the Government's growth mission, recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving,' she told the attendees. She said the Government was delivering on its pledge, made at last year's Mansion House speech, to 'regulate for growth and not just for risk'. The Treasury announced a package of reforms on Tuesday aimed at attracting more investment to the UK, and among individual consumers, to help grow the economy. Ms Reeves said this involves 'rolling back regulation that has gone too far in seeking to eliminate risk', with plans to cut red tape in the City and reform banking rules including the ring-fencing regime. The UK is currently an outlier in forcing banks to separate their retail and investment banking activities, so reforms are hoped to make Britain more competitive globally. Ms Reeves also highlighted efforts to boost retail investment which she said is currently presented 'in a negative light, quick to warn people of the risks without giving proper weight to the benefits'. Plans include potentially changing the language of risk warnings on investment products to encourage more people, particularly women, to take the leap. 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. — Rachel Reeves (@RachelReevesMP) July 15, 2025 Furthermore, the Chancellor said new powers to mandate pension funds to invest in UK assets were 'sending a clear signal' that the Government and industry want to deliver higher returns for savers and more investment for the economy. 'But I am confident that I will not need to use that power because firms see the urgency and importance of this as clearly as I do,' she said. The 'Leeds reforms', unveiled in the West Yorkshire city, are set to be the biggest set of reforms to financial services for more than a decade, according to the Government. But the Chancellor concluded her speech by saying: 'As I look ahead, it is clear that we must do more. 'In too many areas, regulation still acts as a boot on the neck of businesses, choking off the enterprise and innovation that is the lifeblood of growth. 'Regulators in other sectors must take up the call I make this evening not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country.'
