Financing Growth: Labour’s plan for financial services
The financial services sector is one of Britain’s success stories. It contributed 12% of the UK’s economic output in 2023.1 It drives economic growth and creates jobs and prosperity. Labour’s first mission in government is to secure the highest sustained growth in the G7, with good jobs and productivity growth in all parts of the country. This will only be achieved if we champion the UK’s role as a global leader in financial services.
Our vision for the sector is based on six policy priorities:
1. Deliver inclusive growth of the UK’s financial services sector by scalling regional financial centres alongside established hubs in London and Edinburgh and unlocking the full potential of the mutuals sector.
2. Enhance the international competitiveness of the UK’s financial services sector by pursuing a more joined up and innovation-centred approach to regulation and supervision, streamlining the regulatory rulebook in line with the Consumer Duty, strengthening our international engagement in financial services, and building a more collaborative relationship with the EU.
3. Reinforce consumer protection and financial inclusion by exploring alternative models for increasing financial resilience including longer-term fixed rate mortgages, adopting a coordinated cross-sectoral approach to fraud prevention, creating a national financial inclusion strategy, and regulating the Buy Now Pay Later sector.
4. Lead the world in sustainable finance by making the UK a global hub for green finance activity, delivering a world-leading green finance regulatory framework, and partnering with the financial services sector to support the decarbonisation of our homes.
5. Embrace innovation and fintech as the future of financial services by becoming a global standard-setter for the use of AI in FS, delivering the next phase of Open Banking, defining a roadmap for Open Finance, embracing securities tokenisation and a central bank digital currency, and establishing a regulatory sandbox for financial products to reach underserved communities.
6. Reinvigorate our capital markets by reviewing the pensions and retirement savings landscape, enabling greater consolidation of all types of schemes, empowering the British Business Bank to invest more in growth capital, establishing a British ‘Tibi’ scheme to increase institutional investment in venture capital and small cap growth equity, and increasing investment in infrastructure and green industries through Solvency UK reforms.
This is our first statement of intent for financial services. Labour is committed to working in partnership with the sector to define a detailed policy agenda to support growth across the country, embrace innovation, and enhance people’s financial wellbeing.