UK to cut finance red tape and axe EU rules in bid for growth

Jeremy Hunt is set to launch a major reform of the UK’s financial sector with plans to rip up red tape and replace reams of EU regulations.

Dubbed the “Edinburgh reforms”, the changes will be announced by the Chancellor in the Scottish city on Friday as he heralded the “golden opportunity” Brexit provided to reshape the rules governing the financial sector.

Mr Hunt will set out a package of more than 30 regulatory reforms, with plans to “review, repeal and replace” hundreds of pages of EU regulations ranging from disclosure for financial products to prudential rules governing banks.

The plans come as the Government pushes ahead with efforts to end the UK’s sluggish record on growth, after Liz Truss and Kwasi Kwarteng promised a similar set of reforms dubbed “Big Bang 2.0” – itself a reference to Margaret Thatcher’s 1986 policies which kicked off a massive change in the City of London.

“This country’s financial services sector is the powerhouse of the British economy, driving innovation, growth and prosperity across the country,” Mr Hunt said.

Mr Hunt, who will meet with finance CEOs in Edinburgh on Friday, said the Government was 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”.

While promising to protect consumers, the Government is also set to announce changes to ring-fencing rules, which currently require large banks to separate retail and investment arms.

In his autumn statement, Mr Hunt pledged to reform Solvency II, referring to the multi-trillion pound insurance sector, which will ease capital rules for the industry.

The Treasury said that reforms will build on that pledge, with the Chancellor also expected to issue new mandates to the Financial Conduct Authority and the Prudential Regulation Authority to ensure both help “promote the international competitiveness of the UK”.