UK Labour Party manifesto pledges for financial services industry


Labour now have the big majority the polls predicted and as ever a change in government provokes both caution and hope among the investment community as it considers how it might be impacted by a change in government policy.

It is early days for the new government but we do have the pledges in Labour's manifesto to review to understand their approach to financial services.

Let's run through them. 

Pledge 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."

If we ignore the spelling mistake, this is similar in principle to what the Conservatives called 'levelling up' and may provide local opportunities for growth. 

Pledge 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."

Here there are encouraging signs with a shift to re-build those relationships damaged by Brexit as Labour seeks to move closer to Europe even though there are no signs of even rejoining the Common Market.

Pledge 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."

Encouraging signs for those struggling with the cost of living crisis and potentially making house owning a more realistic prospects with longer-term mortgages.

Pledge 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."

This speaks to opportunities to invest in green-energy and house building industries with the potential for regulation to open up those markets further particularly in the area of housing.

Pledge 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."

Digital currency, yes, another side of the crypto revolution in finance with several central banks around the world looking at the creation and regulation of digital currencies. 

Pledge 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."

Growth has been a keyword throughout the campaign with the focus on investing in public finances through growth in the UK economy versus much heavier taxation - easier said than done of course. A sign at least of a more open-minded approach to the finance industry to Jeremy Corbyn and a recognition that the UK will need wealth creators along with taxation.

In summary, nothing groundbreaking or particularly innovative which is encouraging in itself as one of the things the economy likes is gradual rather than radical change, as Liz Truss can tell you...

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