Chancellor Rachel Reeves has unveiled a package of financial services reforms aimed at cutting 'unnecessary' red tape and encouraging more risk-taking by companies and consumers to spur economic growth. Dubbed the Leeds Reforms, the measures include streamlining accountability rules for senior bankers and launching an advertising campaign to encourage consumers to invest cash savings in stocks.
The UK government will review ringfencing rules introduced after the 2008 financial crisis, which protect consumer deposits from banks' riskier activities. Additionally, the independence of the Financial Ombudsman Service will be reduced, and the interest rate and total compensation that banks must pay to wronged consumers will be lowered. Risk warnings on investment products will also be reviewed to ensure consumers accurately judge risk levels.
Reeves announced the reforms ahead of her Mansion House speech to senior financial services bosses in London. She said: 'We fixed the public finances and stabilised the economy. Now we need to double down on our global strengths to put the UK ahead in the global race for financial businesses.' The Treasury stated the measures aim to 'tear down the barriers' to investment and make the UK the top hub for financial services by 2035.
The chancellor faces pressure after official figures showed the economy shrank by 0.1% in May, and she is expected to raise taxes in the autumn budget. Business groups have blamed her £25bn increase in employer national insurance contributions for weighing on growth, alongside US trade war uncertainties.
