LONDON, United Kingdom -The UK government will on Friday unveil post-Brexit plans to overhaul and preserve its powerful financial services industry, as it also seeks to boost a flagging economy facing recession.
Finance minister Jeremy Hunt will outline reforms “to drive growth and secure the UK’s position as a world-leading financial services hub”, the Treasury said in a statement.
Under the plans, banks without major investment activities will be released from a ringfencing regime that currently seeks to separate retail and investment banking arms.
The country’s financial regulators will be given a “new remit” to help deliver economic growth.
And a “widespread review” will see the Conservative UK government repeal “hundreds of pages of EU law”, the Treasury added.
But there it risks a clash with the devolved Scottish government in Edinburgh, which has voiced “deep concerns” about the plans to ditch EU legislation.
It has urged London to think again, assessing it will have a “damaging impact… on people and businesses across the UK”, in areas from food standards to environmental protection.
‘Golden opportunity’
The UK left the European Union at the start of last year, in a move which sparked widespread fear over the global importance of its powerful City finance industry.
According to excerpts from his speech in Edinburgh, Hunt will say Brexit is a “golden opportunity to reshape our regulatory regime and unleash the full potential of our formidable financial services sector”.
“Today we are delivering an agile, proportionate and home-grown regulatory regime which will unlock investment across our economy to deliver jobs and opportunity for the British people,” he will add
UK Prime Minister Rishi Sunak’s government last month admitted that the country’s inflation-wracked economy had fallen into recession.
Hunt — who voted to remain in the EU in the 2016 referendum — recently defended the post-Brexit trade deal with the European Union, describing it as “excellent”.
The UK has been chasing new trade agreements outside the EU, particularly for its key financial services sector that was not covered by a post-Brexit EU trade and cooperation agreement.
But there is mounting concern about the everyday effects on people and businesses of increased costs, red tape and border delays — and its effect on productivity.
It has not helped tame red-hot inflation or cut soaring food bills, according to recent research from the London School of Economics.