Ms Reeves is to pledge a bonfire of financial services regulation as she seeks to rekindle her relationship with the City.
Eight announcements coming in Rachel Reeves Mansion House speech from pensions to tax
All the major changes Rachel Reeves could announce in the Mansion House speech tomorrow have been revealed. Labour Party Chancellor Ms Reeves is to pledge a bonfire of financial services regulation as she seeks to rekindle her relationship with the City.
The Chancellor will vow to cut “reams of financial red tape” when she gives her annual Mansion House speech on Tuesday evening.
Olly Cheng, Financial Planning Director at Rathbones said: “Amid the doom and gloom surrounding the UK economy, mounting pressures on the public purse, and policy reversals on winter fuel payments and welfare reform, the Chancellor’s Mansion House speech presents an opportunity to flip the script – from crisis to confidence.
READ MORE Experian makes major change with millions of users set to benefit
“The Chancellor could take bold choices with capital markets at the heart to get the economy firing, as well as potential game changing measures relating to pensions adequacy, the advice gap and cash ISAs. If so, this could be a stepping stone to be one of the most consequential budgets for personal finances.”
Pensions review of auto-enrolment
The review, led by the Department for Work and Pensions, will explore raising auto-enrolment contributions from the current level of 8% of worker earnings, with employees currently paying in 5% and the employer adding 3%.
A government spokesperson said: “We cannot pre-empt the outcome of the review, with no decision being taken relating to pension contributions.
“We’re reforming the pensions market to drive economic growth, ensure greater security in retirement and put more money in people’s pockets.”
They added: “Our pension schemes bill will make pension pots work harder for savers, and our forthcoming pensions review will explore how we can take this even further to give hardworking people the retirement they deserve. And thanks to our commitment to the triple lock, millions will see their state pension rise by £1,900.”
Cutting red tape
An ally of Reeves said she will announce plans to tear up “reams of financial red tape” and that she would be “ruthless in slashing rules that make the UK uncompetitive”.
That is set to include consulting on proposals to scrap the current legislation for the Certification regime, which covers almost 140,000 finance professionals.
It will also explore proposals to make senior management appointments easier, reducing timelines for review by regulators from three to two months.
Fiscal rules
Ms Reeves will stress her commitment to fiscal rules and market confidence.
The Government has been looking at how to help put more money in people’s pockets. Earning stronger returns on savings by encouraging investing could be one way to do this, although the value of investments can go down as well as up.
The aim of a potential cut in the cash Isa allowance could have encouraged more investment in stocks and shares, some parts of the industry argued.
But some savings providers also argued that any cut to the cash Isa may simply encourage savers to park their money in taxable savings accounts, rather than the stock market.
Tax rises
Some in the City worry that Reeves will seek to fill fiscal gaps with tax rises on banks or wealthy individuals, such as increasing the bank levy.
A Treasury spokesperson said: “Our ambition is to ensure people’s hard-earned savings are delivering the best returns and driving more investment into the UK economy.”
“Regulate for Growth”
In a bid to reframe the UK’s approach, Ms Reeves will reaffirm her promise to change regulatory culture so it “regulates for growth”, not merely for risk.
Speaking previously, Ms Reeves said: “We are taking further action to free businesses from the shackles of regulation.
“By cutting red tape and creating a more effective system, we will boost investment, create jobs and put more money into working people’s pockets.”
Cash ISA u-turn
Cash Isas will be left untouched at next week’s Mansion House speech, in a move that has been welcomed by savings experts.
Speculation had been mounting that plans to cut the annual tax-free cash Isa allowance could be announced in Chancellor Rachel Reeves’s Mansion House speech on July 15.
But the PA news agency understands that Ms Reeves will instead focus on new plans to provide consumers with the information and support they need to invest.
The Government is expected to continue talking to industry members and others about the options for reform, with a broad consensus that the UK’s savings and investment culture needs to be encouraged.
Senior managers’ regime overhaul
The Treasury plans to reduce red tape and accelerate growth in the City of London by axing parts of a scheme that certifies almost 140,000 finance professionals.
The senior managers and certification regime began after the 2008 financial crisis to try to make individuals more accountable for their conduct and competence, but its complexity and delays in processing applications led to complaints.
Industrial strategy
Reeves will describe financial services as one of eight key “growth” sectors in the Government’s new industrial strategy. She is expected to outline measures to boost the sector’s global competitiveness.