Mansion House speech: Rachel Reeves to ‘rip up’ red tape in financial services
Rachel Reeves is to pledge a bonfire of financial services regulation as she seeks to rekindle her relationship with the City.
The Chancellor will vow to cut “reams of financial red tape” when she gives her annual Mansion House speech on Tuesday evening, according to people familiar with the matter.
That is set to include consulting on proposals to scrap the current legislation for the Certification regime, which covers almost 140,000 finance professionals, as well as explore proposals to make senior management appointments easier, reducing timelines for review by regulators from three to two months.
Reeves is also expected to intensify the government’s push to attract financial services firms from overseas, through the creation of a new concierge service, designed to provide tailored support to make it easier for them to invest, set up and grow in Britain. The service will likely include helping companies to obtain visas and choose where is best to set up based on regional skills and expertise.
Scaling up more fintech firms will also be a key priority for Reeves, who is understood to be planning to create a dedicated point of contact at financial regulators for scaling businesses, who can connect them with specialist support to make it easier for them to gain the relevant regulatory approvals and access finance.
Tax uncertainty clouds business confidence
While the pledge to slash red tape will be welcome news for financial services firms, the big unknown among businesses remains which taxes the chancellor will raise in the autumn – and by how much.
The government has doubled down on its commitment not to raise income tax, national insurance or VAT rates, meaning more taxes on businesses could be one of the few options left to the Treasury as it seeks to fund billions of pounds in extra spending commitments on defence and welfare.
The government also refused to rule out introducing a tax on wealth, a move likely to intensify a recent exodus of high net worth individuals from the UK, following the scrapping of non-dom tax privileges.
The Institute of Chartered Accountants in England and Wales (ICAEW) has warned of “sky high tax worries” and a weak domestic economy are treading on business owners’ morale.
Its business confidence monitor index was minus 4.2 in the second quarter of the year, the weakest reading since the aftermath of Liz Truss’ mini-budget and the fallout of Russia’s full-scale invasion of Ukraine, which led to high energy prices.
The hefty tax burden was cited as a concern for more than half of 1,000 accountants surveyed, with respondents saying they were more worried about further tax rises later this year.
City analysts have predicted that Chancellor Rachel Reeves may have to raise as much as £30bn later this year.