Introduction
On 14th November 2024, the Chancellor Rachel Reeves, delivered her Mansion House package setting out the government’s plans for the UK economy moving forward. The agenda looks to create partnerships between the UK government, the industry, regulators and other stakeholders to help grow the UK financial sector and develop opportunities for the future.
There were three key themes discussed during the Mansion House package:
- Economic Stability;
- Investment in Financial Services; and
- Reform to Boost Innovation and Growth.
Economic Stability
At the basis of the action plan is stability within the economic sector. At the core of this stability is long-term focus on vital public investment and stabilising public finances, via the strengthening of the UK financial market. Key to the strategy is to drive an increase in private investment accompanied by reform within the economy to incentivise and drive growth within the financial sector.
Investment in Financial Services
The UK has long had a strong financial services sector and the Chancellor wants to continue to innovate and grow the sector via boosting economic capacity and efficiency. The centrepiece of this targeted innovation and growth in the sector is the attraction of investment from across the world to invest directly into the UK economy.
The key areas that the government is targeting to help drive innovation and growth includes:
- Developing and publishing the Financial Services Growth and Competitiveness Strategy, setting out the approach moving forward to help enhance the UK financial services competitiveness. This is due to be published in Spring 2025, with a current call for evidence in place across the financial sector;
- Consolidation of the UK pension system post Pension Investment Review, projected to provide ‘billions of pounds of new investment for the UK economy and boost returns for savers’;
- Continue the growth of sustainable finance framework to support the green transition alongside the growth of the UK economy, including the following actions by the government:
- Consultation on streamlined sustainability disclosures for economically significant companies;
- Consulting in the first half of 2025 on steps moving forward on green finance transition; and
- Consultation on draft legislation on bringing ESG rating providers into regulatory sphere.
It is clear that the UK government is continuing to target the sustainable finance market, with growth of the framework to allow the UK to continue to be a leader within green finance. Alongside reform in the pensions market and further data gathering of UK competitiveness, the government is positioning itself to utilise data gathered to inform change. Additionally, it was also stated that the UK will continue to work to work openly with international investment, working with diverse economies across the globe to boost investment and stimulate growth.
Reform to Boost Innovation and Growth
The government has identified a need to rebalance the UK financial system, to encourage growth and investment through reform. It was stressed that this will not see diminishing protections for investors. These reforms include:
- Targeting the FCA, Prudential Regulation Committee, Financial Policy Committee and Payment Systems Regulator with a focused remit economic growth;
- Reaffirming the Monetary Policy Committees 2% inflation target (against the Consumer Price Index) and objective of broad-based and resilient growth;
- Supporting households to make informed financial choices, through FCA consultation on pension by the end of 2024;
- Modernising the rules that underpin the Financial Ombudsman Service;
- Launching consultation on the abolishment of the Certification Regime, to be replaced by a more proportionate approach that reduces cost and allows focus on growth; and
- Laying out legislation to modernise Building Societies Act 1986 and providing further funding to law reviews within the sector, inclusive of calls for evidence, reporting on current mutuals landscape by regulators and establishment of industry led Mutual and Co-operative Business Council.
These reforms are designed to support the sector and allow firms room to grow. Perhaps the most interesting of these actions is the reform of the Certification Regime. What this will look like appears vague at this time and care will be needed to ensure that the protections that the Certification Regime provides is not lost.
Conclusion
It is clear from the Mansion House package that the government has clear objectives in 2025. However, it is unclear if all the elements set out will materialise or if consultation with the wider industry will see changes to this roadmap. It is therefore important that firms maintain horizon scanning as we move into 2025 and are prepared for any potential regulatory changes.
How can Complyport help?
Complyport can support your firm in understanding and following these changes by providing:
- Regulatory Guidance: helping your firm understand the FCA’s expectations and providing expert advice on the relevant regulatory requirements;
- Documentation updates: assistance in drafting appropriate policies and procedural documents;
- Ongoing Support: providing ongoing support to ensure that your firm remains compliant as regulations evolve;
- Training: providing training sessions to educate staff on the practical requirements and best practices for compliance.
By partnering with Complyport’s experience and expertise, you can navigate the complex regulatory environment seamlessly and maintain high levels of compliance with the FCA’s rules and expectations.
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