Reeves vows to rip up City red tape as Chancellor sets sights on ‘unlocking’ £80bn from pension megafunds
Chancellor Rachel Reeves has vowed to rip up City red tape and “unlock” £80billion from new pension megafunds in a fresh push for economic growth.
Reeves, who delivered her first Mansion House speech last night, claimed altering the UK’s regulatory model would make Britain’s economy more dynamic and more competitive.
She said: “We will review the strategic guidance that we give to the CMA and to other major regulators to underline the importance of growth. That includes our financial service regulators.
“It was right that successive governments made regulatory changes after the Global Financial Crisis to ensure that regulation kept pace with the global economy of the time but it is important that we learn the lessons of the past.
Reeves vows to rip up City red tape as Chancellor sets sights on ‘unlocking’ £80bn from pension megafunds
PA
“These changes have resulted in a system which sought to eliminate risk taking. That has gone too far and, in places, it has had unintended consequences that we must now address.”
Reeves claimed the Senior Managers and Certification Regime became “overly costly and adminstratively burdensome”, later warning post-crisis pay structures left the UK as an “international outlier”.
The Chancellor’s broader approach is to “streamline” regulations to turn the UK into a country “regulating for growth” rather than risk.
In a separate part of her speech, Reeves detailed how her pensions plan could unlock as much as £80billion.
Skyline of the City of London during sunrisePAShe said: “We will legislate on measures to consolidate the Local Government Pension Scheme, one of the largest pension schemes in the world, and require that the 86 Local Government Pension Scheme administering authorities consolidate all their assets into 8 pools.
“These reforms will deliver real change in our economy. Through consolidation of the DC market and Local Government Pension Schemes into megafunds.
“Previous domestic and international experience suggests that we could unlock around £80bn for investment in private equity, including exciting growth businesses and in vital infrastructure projects including transport, energy and housing projects here in the UK.”
However, with Goldman Sachs expecting interest rates to remain higher for longer as a result of Reeves’ tax-hiking Budget, Shadow Chancellor Mel Stride was far from convinced by last night’s Mansion House speech.
Mel Stride
PA
He said: “The Chancellor has delivered her Mansion House speech on pension reforms against a backdrop of the growing instability caused by her Budget.
“We will study the detail of these reforms, many of which follow on from those we were pursuing in government.
“But let’s be clear, reforms which are aimed at increasing growth will be significantly undermined by Labour’s Budget which sent precisely the wrong signal to investors and wealth creators.”
Following Reeves’ Budget, the Office for Budget Responsibility downgraded the UK’s growth rate by 0.7 per cent over the next five years and forecast inflation to remain higher compared to previous estimates.
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