October 4, 2022

Big Bang 2.0! Chancellor to unveil plans for wave of City deregulation

Big Bang 2.0! Chancellor to unveil plans to boost business with new wave of City deregulation

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The Chancellor of the Exchequer will today set out plans for a wave of financial deregulation that has been dubbed ‘Big Bang 2.0’.

Kwasi Kwarteng is to reveal some of the reforms alongside a mini-Budget which is expected to represent the biggest set of tax-cutting measures in more than 30 years.

The deregulation plans will herald a wider package of measures to be set out later in the autumn.

Growth targets: Chancellor Kwasi Kwarteng’s (pictured) mini-Budget is expected to represent the biggest set of tax-cutting measures in more than 30 years

Though details were last night yet to be made public, the idea of pushing ahead with the long-promised scrapping of red tape won a broad welcome in some quarters.

Lord Tyrie, the former MP who once led the Commons Treasury committee and later chaired the UK’s competition watchdog, said: ‘The regulatory framework needs frequent review if it is to remain effective and proportionate.’

The idea echoes the original ‘Big Bang’ of 1986 when deregulation of the City of London under the Thatcher government prefigured its rise as a global financial centre.

Kwarteng proposed a ‘Big Bang 2.0’ during a meeting with banking bosses on his first full day in office this month. He told 14 executives that the Government would pursue an ‘unashamedly pro-growth agenda’.

The package looks set to include reform to regulation of pension funds and insurers so that they can release more capital for investment, as well as changes to stock market listings rules to make the UK more attractive for company flotations.

Prime Minister Liz Truss told a business round table in New York this week: ‘We want the City to be the most competitive place for financial services in the world, and we see that as a key part of the levelling up agenda. 

When we unblock capital, that capital will be used across the UK to make every industry become more productive and competitive.’

The plans look likely to build on proposed financial services legislation introduced to Parliament earlier this year. The new government has already signalled that it wants to scrap a cap on bankers’ bonuses.

A spokesman for industry lobby group The City UK said the Government looked keen to ‘go even further’ than what was already in the bill before Parliament but cautioned: ‘Regulation cannot be done at a mile a minute. Changes you make have implications on your trading relationships around the world.’

Dealing with Solvency II – rules governing the insurance industry – is among issues on the cards. Also likely to be in the spotlight will be MiFID, a package of EU regulation including rules on company research seen as hindering the ability of small companies to raise capital.

‘There would be broad applause across industry should the Government be able to move more quickly,’ the spokesman for The City UK said.

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