Labour’s Shadow City Minister Tulip Siddiq writes for City A.M. on her party’s new financial services council and why the Square Mile can expect evolution, not revolution, if they take power next year
Keir Starmer and Rachel Reeves have said that economic growth would be an obsession for a Labour government – the core mission which underpins any others – if we are given the privilege to serve as the next Government.
This will be no easy task. After 13 years of government either neglecting or dictating what’s best for business we are stuck in a spiral of stagflation: the Bank of England expects no growth before 2025; and the OECD forecasts the UK will continue to grapple with the highest inflation and the lowest growth in the G7.
But it’s not all bad news. The resilience of our world class financial services sector which, despite headwinds, delivered a trade surplus of over £75bn, amounting to 50 per cent of the UK’s total services trade surplus in 2022.
Any plan to lift the UK economy out of this stupor must include a plan for our financial services, co-created with business, at its heart.
Since becoming Shadow City Minister, I have seen firsthand the value of building a constructive partnership with financial services firms and consumer groups to achieve our shared ambitions.
When the Financial Services and Markets Act was progressing through Parliament, I worked closely with industry to ensure that the final legislation delivers regulatory reforms that will enable the sector to thrive outside of the EU.
While the government drags its heels on regulating the Buy Now Pay Later (BNPL) sector, last month I worked with major BNPL and consumer groups to discuss a plan for regulating the sector. Together we determined the key principles for regulation to protect millions of consumers who use BNPL products.
It is clear that what firms are crying out for most is stability.
Time and time again I have heard industry say that what it needs from a future Labour government is not only fiscal responsibility and respect for independent institutions, but regulatory consistency to allow recent reforms to “bed-in” and provide market certainty for investors.
I recognise that the City needs further clarity on Labour’s vision of unleashing the full potential of the financial services sector to drive growth.
In partnership with financial services firms and consumer groups, my team and I are undertaking a review to understand how we ensure financial services drives growth, enables regional development, and provides a global platform for the UK.
I am leading this financial services review with the support of an advisory panel comprised of diverse senior leaders with expertise across the sector, from Schroders and the Yorkshire Building Society, to the London Stock Exchange and Prudential.
The result of this review will be Labour’s vision for the sector if we win the next election.
My commitment to you is to drive Labour’s crucial missions: sustained growth, regional development, and a partnership with the private sector to make working people across the UK better off. This review, and our relationship with the sector, is central to Labour unlocking the power of our financial services for everyone’s benefit.