After the Edinburgh reforms, we now have the Leeds reforms! The Government has announced an ambitious package of measures to attract inward investment into the UK and financial services businesses. Rachel Reeves announced the UK’s first Financial Services Growth and Competitiveness sector plan. The plans include:
- giving consumers support to invest;
- create good skilled jobs;
- encouraging banks to offer investment opportunities to people with cash in low-interest accounts;
- encouraging the industry to highlight to consumers the opportunity to invest when they can – the Government says that, based on current trends, if consumers move £2,000 from low interest accounts into stocks and shares, they could be over £9,000 better off in 20 years’ time;
- the BoE will allow more lending at over 4.5 times a buyer’s income and simplified FCA Rules, if adopted, will make remortgaging easier. The changes will also allow the Nationwide to make its “Helping Hands” scheme available to lower income borrowers – now the thresholds are £30,000 for solo and £50,000 for joint applicants (£5,000 lower than previously);
- there will be a new government-backed Mortgage Guarantee Scheme to ensure high loan-to-value mortgages are available in times of economic uncertainty;
- FOS will need to align its decisions more closely with FCA rules;
- the SMCR will be radically streamlined;
- the FCA is to review how the Consumer Duty affects and applies to wholesale firms;
- the MREL threshold will be raised to £25-49bn;
- the Basel 3.1 rules will come in from January 2027;
- reform of the ring-fencing regime;
- a major FPC review of bank capital requirements;
- providing bespoke support to fintechs;
- greater financial capacity for the British Business Bank; and
- progressing the Berne Financial Services Agreement, so that it is fully implemented by the end of the year.
See our separate posts on some of these initiatives!