Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it’s investigating the financials of Elon Musk’s pro-Trump PAC or producing our latest documentary, ‘The A Word’, which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.
Rachel Reeves has told the City that restrictions imposed after the 2008 banking crash “went too far”, as she tries to regain the trust of the finance sector by promising to ease banking regulations.
In a speech at Mansion House on Thursday evening, the chancellor sought to win back the business community following intense criticism of last month’s Budget.
It follows the announcement of her plans to create a series of pension megafunds, which the former Bank of England economist hopes will unlock around £80bn of new investment into UK businesses and infrastructure.
By rowing back on regulation, Ms Reeves is pinning her hopes on being able to fire up the economic growth which Labour put at the heart of its manifesto plan for government.
It will be the first easing of the rules since the then Labour chancellor Alistair Darling was forced to nationalise two banks and impose a raft of restrictions in the wake of the 2008 financial crash.
Ms Reeves’s controversial Budget, with £70bn of spending increases and a record £40bn of tax rises, has prompted numerous challenges over whether she was serious about economic growth.
Her speech came as:
In her speech, Ms Reeves claimed that post-financial crisis regulatory changes to reduce risk-taking “has gone too far” and led to unintended consequences.
She unveiled the first ever financial services growth and competitiveness strategy to be published alongside industrial strategy in spring 2025.
But her attempts to woo financial leaders came as the Confederation of British Industry led the continued criticism of her Budget.
CBI chief executive Rain Newton-Smith said: “There’s a lot of disquiet in the business community on whether this government is solidly focused on that growth mission. If you look at the next three to five years, you see that business investment is weaker because of decisions made in the Budget.”
She added: “Business leaders do credit the focus on long-term infrastructure … but what I don’t see is that real plan for growth over the next three to five years. I think that has really taken the business community by surprise.”
In her first Mansion House speech as chancellor, Ms Reeves warned that the UK’s status as a global financial centre cannot be taken for granted.
She argued that, in the wake of 2008, a system has been created which seeks to eliminate risk-taking but holds back economic growth, saying: “The UK has been regulating for risk, but not regulating for growth.”
She outlined a plan to rebalance the system, setting the financial services sector up to innovate and grow with opportunities for investment in businesses, infrastructure and clean energy across Britain.
She said: “Before we came into government, I was clear that the financial services sector must play a central part in our economic vision and our plan for economic growth.
“Because I know that this sector is the crown jewel in our economy. It employs 1.2 million people, from London to Edinburgh, and from Manchester to Belfast. It is one of the country’s largest and most productive sectors, accounting for 9 per cent of our economic output.
“And it is a global success story: we are the second largest exporter of financial services in the G7. But in a highly competitive world, we need to earn that status and we need to work to keep it.”
Ms Reeves referenced her plans for pension megafunds, which will consolidate the 86 existing pots into a handful of funds run by professional fund managers.
Speaking ahead of the address, Ms Reeves promised “the biggest set of reforms to the pensions market in decades”.
She described her plans as a: “A long-term strategy to harness the strengths of the financial services sector: making the UK a global leader in sustainable finance, developing the right approach to redress to reduce uncertainty, reinvigorating our capital markets by unlocking private investment through our pension funds, and reforming our approach to regulation to make it more dynamic and more competitive.
“Taken together, these measures represent the most pro-growth financial services package since the financial crisis.”
As she sought to reset her relationship with the City, a fresh row broke out over how many farms may be affected by the government’s new inheritance tax rules.
While the Treasury claims Defra figures show only 28 per cent of farms will be forced to pay the levy, farmers’ groups say that in fact up to two-thirds (66 per cent) could be hit by the tax grab.
But a source close to environment secretary Steve Reed has blamed the National Farmers’ Union (NFU) for confusing the issue with incorrect analysis of Defra figures.
Ms Reeves imposed inheritance tax on farmland for the first time since 1992, with a 20 per cent rate being paid for all land valued at £1m or more, although couples can make use of a pooled allowance of £2m plus personal allowances of up to £500,000 each.
Mo Metcalf-Fisher, from Countryside Alliance, said: “With the Treasury figures being so wildly different to Defra’s, an urgent investigation is vital.”
