CSA Chief Executive Chris Leslie writes:
“How will a ‘new’ Government led by Andy Burnham change things for our sector? The first thing to say is that while technically this is a new regime, it is (of course) still a Labour administration with the same manifesto commitments and many of the same faces. So the broad agenda being pursued by Starmer/Reeves continues – and this is certainly true of many of the consultations and legislation already in the pipeline. So we continue to expect the Consumer Credit Act to gradually make its way through the Lords and then Commons in the autumn.
“Lucy Rigby MP, who briefly moved to the role of Chief Secretary to the Treasury, is now back in the office she held previously as Economic Secretary, overseeing the financial services policies of the Government. This is positive from our perspective, we have a good working relationship with Lucy who is also familiar with some of the challenges recently encountered and the reforms we hope to still see.
“John Healey as the new Chancellor is a pragmatic and sensible Minister who will also understand the value of a well-functioning credit cycle to the wider economy and his growth agenda. I worked closely with John for many years (indeed co-wrote a pamphlet with him a long while ago when we were working together on devolution and local government) and so I fully expect him to appreciate why we will continue to call for some of the unnecessary bureaucracy and burdens on businesses to be relieved.
“Nevertheless, a new Prime Minister does change and can change the policy agenda for an administration even if it is of the same party. Some commentators anticipate a slight ‘leftward’ step with a desire to spend more on certain public services and perhaps raise taxes more than previously planned. We will probably see the upshot of any such choices at a Budget some time in the autumn months. If bond markets feel uncertain about the commitment to fiscal rules and fully-funding any spending changes, this could raise the premium on Government debt costs and in turn lead to higher interest rates more broadly across the economy. That is probably the main issue to watch for in the weeks to come. If there is a ‘leftward’ step in this new Government, which is already talking about action to tackle the high cost of living, it isn’t inconceivable that they will look to the financial services sector to somehow take more responsibility for this.
“It would be unfair if politicians of any parties try to crank up anti-bank or anti-credit rhetoric once again, and I hope that won’t happen. But in what is currently a highly politically competitive environment in the UK right now, heading into the party conference season, I feel that the financial services sector needs to stay alert to this.”