In anticipation of the next general election, expected to be called by Prime Minister Rishi Sunak "in the second half" of 2024, the Labour Party is swiftly setting its policy agenda. Labour has unveiled a plan which it says is aimed at reinforcing the UK's status as a global leader in the sector.
The financial services industry, a cornerstone of the British economy, accounted for 12% of the UK's economic output in 2023, underscoring its pivotal role in driving growth, jobs, and prosperity.
In alignment with its ambitious goal to secure the highest sustained growth in the G7, Labour's vision for financial services is structured around six key policy priorities.
Innovation and fintech are acknowledged as the future of financial services, with Labour planning to set global standards for AI use, advance Open Banking and Finance, explore securities tokenisation and a central bank digital currency, and establish a regulatory sandbox to reach underserved communities.
Labour intends to promote inclusive growth by scaling regional financial centres beyond the traditional powerhouses of London and Edinburgh and by tapping into the mutuals sector's potential.
To boost the international competitiveness of the UK's financial services, the party proposes a unified and innovation-driven regulatory approach, a streamlined regulatory rulebook, enhanced international cooperation, and a more collaborative relationship with the EU.
Consumer protection and financial inclusion are also high on Labour's agenda, with plans to explore alternative financial resilience models, a coordinated approach to fraud prevention, a national financial inclusion strategy, and regulation of the Buy Now Pay Later sector.
Recognizing the urgent need for environmental sustainability, Labour aims to position the UK as a global hub for green finance, develop a leading green finance regulatory framework, and collaborate with the sector to decarbonize housing.
Finally, to rejuvenate the UK's capital markets, Labour proposes a review of the pensions and retirement savings landscape, encourages greater scheme consolidation, seeks to empower the British Business Bank, introduces a British 'Tibi' scheme for venture capital, and promotes investment in infrastructure and green industries through Solvency UK reforms.
This announcement marks Labour's first statement of intent for financial services, emphasizing its commitment to partnership with the sector to refine its policy agenda, foster growth, innovate, and improve financial wellbeing across the country.
Labour's plan for financial services can be found here