The Conservative Party Shadow Chancellor, Sir Mel Stride, has lambasted Rachel Reeves' tenure at the Treasury as little more than 'tinkering' with City reform. In a stark warning to her successor, he cautioned that failure to drive forward deregulation will create a 'hostile' environment for banks and severely impact market growth.
Reeves' legacy in the Treasury is set to be scrutinised further on Tuesday when she delivers her Mansion House address, which is expected to outline the next steps in her deregulation agenda. The introduction of the Leeds Reforms has been touted as a key component of this push, aimed at boosting retail investment and reducing regulatory burdens. However, critics have dismissed these efforts as 'untransformative'.
Stride's Conservative Party has pledged to take a more aggressive approach to dismantling regulation, with plans to scrap the Financial Ombudsman Service and abolish ring-fencing in its entirety. This move is expected to free up £1.5bn in capital, a prospect welcomed by major banks such as Natwest, Lloyds, HSBC, and Santander.
The proposed overhaul of banking regulations also includes a change in how lenders' capital requirements are set. Currently, this falls under the purview of the Bank of England's Financial Policy Committee. However, Stride has indicated that the decision will be handed over to an entity that considers competitor jurisdictions, aiming to attract more businesses to the UK.
The Conservative Party's push for deregulation has not been without its challenges. A recent high-profile dispute with the Bank of England over fintech firm Revolut's pursuit of a banking licence has highlighted the tensions between regulatory bodies and industry leaders. Stride has reiterated that new entrants are being stifled by excessive regulation, calling for a fundamental review of the UK's financial framework.