Last week the Labour Party published its Financial Services Review based on six policy priorities – Financing Growth: Labour’s Plan for Financial Services.
The report is the first stage in outlining Labour’s vision for the future of Britain’s financial services and its agenda will continue to develop over time.
Key priorities include:
- Improving the efficiency of regulatory and supervisory activities and promoting a joined-up approach focused on innovation – including a new Regulatory Innovation Office to improve accountability and promote innovation in regulation across sectors.
- Streamlining the regulatory rulebook to align with the Consumer Duty – including directing the FCA to issue an open call to industry to identify rules which have been made redundant by the Consumer Duty.
- Upholding the ring-fencing regime – supporting the on-going work to align with the resolution regime, as recommended by the Skeoch Review.
- Expanding the UK’s agreements with international financial centres to increase financial services trade – including the fintech bridge with Singapore, the Berne financial services agreement with Switzerland, and the UK-Japan Financial Dialogue and Financial Regulatory Forum.
- Cooperating with the EU in areas of mutual interest and removing unnecessary barriers for firms – including building on the UK-EU Financial Services MoU and exploring opportunities to reduce barriers to trade in areas where UK/EU regulations deliver similar outcomes, including finding a sustainable solution for cross-border clearing.
- Embracing innovation and fintech – including delivering the next phase of Open Banking and defining a roadmap for Open Finance.
- Fulfilling the UK’s commitment to the Sustainability Disclosure Requirements – aligning with the International Sustainability Standards Board standards and the TPT disclosure framework.
- Establishing a British ‘Tibi’ scheme – intending to increase institutional investment in venture capital and small cap growth equity and increasing investment in infrastructure and green investment.
This is the first of a planned series of blogs on UK policy developments in financial services regulation leading up to the General Election. I think that the Labour plans had some really interesting features. On the one hand, a message of continuity through enhancing the competitiveness of the UK financial services sector, leading the sustainable finance revolution and enhancing innovation and fintech. On the other hand, there are definitely some new messages on the direction of travel. I would flag four of these although there are others:
- The reference to building a more collaborative relationship with the EU. In other words, where it makes sense the sense that there is a post Brexit UK aversion to adopting a similar regime may be set aside.
- Full speed ahead on the consumer agenda and if anything, a hint that it will be broadened through products like longer term fixed rate mortgages.
- Making the city truly national through encouraging job creation outside London and Edinburgh. How this will be done is another question.
- Creating the framework for savings into UK venture capital and small caps. This last area has been much talked about and the devil will be in the detail.
A lot more to say but the overall message is of a pretty full financial services regulatory programme designed to meet broader policy goals.