King’s Speech to unleash wave of City reforms
A host of Canada reforms will be set in stone at next month’s King’s Speech, as the Prime Minister hopes to use the moment to turn a corner from doubts over his leadership.
Impending reforms, including scrapping the payments watchdog and overhauling the financial ombudsman, are set to be legislated in the financial services bill.
Chancellor Rachel Reeves has hailed a “golden age” for the City in recent months as she pledges to loosen regulation to stimulate the country’s economic engine room.
But Reeves has been told that these ambitions are at a “crucial juncture” as experts warn the UK’s financial sector has been lagging behind wider economic growth for the past decade.
The Treasury is hoping to ramp up its plans to unleash growth in the City by using the King’s Speech to secure legislation for a number of previously announced reforms.
Reeves hopes reforms will boost City
These include scrapping the Payments Systems Regulator, which Reeves and Prime Minister Keir Starmer pitched as a landmark policy to cut “unnecessary regulation”.
But the timeline of the watchdog’s abolition had been unclear, with its boss saying in February staff are carrying on as usual because he doesn’t think the body will be abolished before the start of next year.
The Treasury has also promised a significant overhaul of the Financial Ombudsman Service (FOS), which resolves disputes between consumers and City firms.
The reforms are intended to slim down the FOS so it acts as an impartial dispute-resolution service which carries out investigations “quickly and effectively”.
A public consultation found last year that – in a small but significant minority of cases – the ombudsman acted as a “quasi-regulator”.
King’s Speech crucial moment for Starmer
The Treasury is also expected to legislate on scrapping a divisive certification regime, which requires financial services firms to declare on a directory every year that thousands of senior staff are fit and proper.
David Postings, chief executive of banking trade body UK Finance, told the Financial Times the King’s Speech is an opportunity to deliver an “ambitious financial services bill” to push through these reforms.
“The government and regulators are undertaking a major programme of regulatory reform, some of which requires primary legislation,” he said.
The Prime Minister is expected to use the King’s Speech on 13 May to convince voters, and his party, that he is making progress in government, following what is expected to be a damaging set of local election results on 7 May.