The chancellor’s raft of financial services reforms are “unconvincing”, a cross-party group of MPs has said.
The Treasury select committee, chaired by Conservative MP Harriett Baldwin, has said that none of Jeremy Hunt’s so-called Edinburgh reforms implemented so far “will make a substantial difference to the UK economy”.
It comes after the chancellor unveiled plans last December to update regulation of the financial services sector in the wake of the UK’s departure from the European Union.
Among the proposals was the plan to reform post-2008 rules on bank ringfencing, where lenders separate their retail activities from their riskier investment banking arms.
In total, Hunt’s plans contained more than 30 proposals focused on repealing retained EU law in financial services and replacing it with a new framework.
The Treasury committee outlined the chancellor’s claim to have completed 21 of the 31 reforms to financial services he set out last year.
But the committee 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.
“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.
She added: “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.”
Economic secretary to the Treasury Bim Afolami responded: “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.”
Afolami, who was appointed in Rishi Sunak’s reshuffle last month, will be speaking in Edinburgh today to mark the anniversary of the financial reforms.