A top Treasury minister said the government was not “deregulating for deregulation’s sake” today as the government tries to soothe concerns it will overzealously slash rules governing the financial sector.
Speaking at the Bloomberg Global Regulatory Summit, chief secretary to the Treasury, John Glen, said that the government was committed to the independence of the regulators and would not engage in a “race to the bottom” on regulation,
The reassurances come after a tussle between the two top financial regulators with the government over so-called “call-in powers” included in the Financial Services and Markets Bill, which would have allowed ministers to overturn decisions made by financial rulemakers and more quickly scrap red tape in the sector.
Rishi Sunak last month scrapped the plans for the time being after stern warnings of the powers’ threat to the UK’s financial standing.
Glen added that the landmark financial services and markets bill, which ministers have claimed will unleash a ‘Big Bang 2.0’ in the City, will be designed to boost the UK’s international standing rather than scrap red tape for the sake of it.
“I would like to take this opportunity to put to bed once and for all that this is deregulation, for deregulation’s sake,” he said.
“And I say unequivocally there is no race to the bottom. Instead, we are looking for opportunities […] to make UK financial services firms more competitive and support them to drive growth while maintaining high regulatory standards.”
Chancellor Jeremy Hunt revealed plans to scrap EU-era Solvency II rules in the Budget last month in a bid to free up billions of pounds of investment locked up on the books of UK insurers.
Glen’s comments today come amid reports that the UK was now targeting EU MIFID II rules for reform, which have been a target of criticism in the City for hampering the quality of investment research available. The rules forced firms to ‘unbundle’ their brokerage and research fees to avoid conflicts of interest.
Sky News reported today that ministers would review the rules as part of wider package of reforms, which could include changes to so-called ringfencing rules for lenders in a bid to free up investment.