UK

Promised reforms to City ‘feel like a damp squib’, says Treasury Committee

The Chancellor promised reforms to the UK financial services last year (Yui Mok/PA)
The Chancellor promised reforms to the UK financial services last year (Yui Mok/PA) The Chancellor promised reforms to the UK financial services last year (Yui Mok/PA)

A set of reforms to the City promised by the Chancellor last year have been left feeling like a “damp squib” as much of what he said he has delivered has not materialised, an influential group of MPs has said.

The Treasury Committee said the Chancellor claimed to have completed 21 of the 31 reforms to financial services he set out last year.

The group’s analysis found that six of the 21 are in fact not complete, and a further six should not have even been considered reforms in the first place.

These are things like publishing documents or welcoming a consultation, which is not the same as reforming something, the committee said.

“More than a decade after the financial crash and six years after the UK voted to leave the European Union, the Treasury was absolutely right to look at updating regulation of the financial services sector and identifying rules which needed to be reformed or removed to encourage growth in this important economic sector,” said committee chair Harriett Baldwin.

The suggestions were called the Edinburgh reforms when laid out last December by Chancellor Jeremy Hunt.

They included changes to short selling disclosures, new remits for watchdogs, repeals of some EU rules and reforming some taxes.

Ms Baldwin, a Conservative MP, said: “We welcome many of the changes as logical and sensible measures. We do, though, question the validity of claims that welcoming consultations, establishing reviews or publishing documents should be considered reforms.

“The Edinburgh reforms were given considerable fanfare last December but, 12 months on, the lack of progress or economic impact has left them feeling like a damp squib.”

In a press release to mark the year anniversary of the Edinburgh reforms, the Government said it had delivered 22 of the 31 promises.

Without acknowledging the Treasury Committee’s claims, Economic Secretary to the Treasury Bim Afolami said: “My number one priority in this role is to deliver on the Edinburgh reforms.

“The reforms have shown the UK’s dedication to fostering a sensible, innovative and robust financial landscape – over the past year we’ve made significant strides towards creating an environment that supports economic growth, openness and the well-being of savers.”