Rachel Reeves vows to rip up rules acting as 'boot on the neck' of businesses

Rachel Reeves has vowed to rip up regulations acting as a "boot on the neck of businesses" to drive growth to benefit ordinary households.

In her Mansion House speech to City chiefs, the Chancellor said her plans for an overhaul of financial services would have a "ripple effect" across the whole economy.

The Leeds reforms, unveiled in the West Yorkshire city on Tuesday, include an overhaul of key banking rules, cutting red tape in the City, and getting more people moving cash out of savings and into stocks and shares.

It comes after she promised last year to "regulate for growth and not just for risk", with a bonfire of regulations that would shift the system back towards a pre financial crash model.

The Chancellor said: "We have been bold in regulating for growth in financial services and I have been clear on the benefits that that will drive, with a ripple effect across all sectors of our economy, putting pounds in the pockets of working people.

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"Through better deals on their mortgages, better returns on their savings, more jobs paying good wages across our country. As I look ahead, it is clear that we must do more.

"In too many areas, regulation still acts as a boot on the neck of businesses, choking off the enterprise and innovation that is the lifeblood of growth.

"Regulators in other sectors must take up the call I make this evening not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country."

In a nod to a tricky few weeks, which saw her in tears during PMQs, Ms Reeves said: "Recently, on a visit to a school, a girl asked me – “what job would you do if you could do any job in the world?”

"Given the events of the last few weeks, I suspect many of you would sympathise if I had said – “anything but Chancellor.” But I didn’t. I am proud to stand here tonight and address you for a second time at Mansion House as the Chancellor of Exchequer."

The reforms are aimed at attracting more investment to the UK and encouraging ordinary consumers to invest, to help grow the economy.

Banking rules will be reformed so the retail operations, such as current accounts and mortgages, are no longer ring fenced from more risky investment activities, in a bid to make Britain more competitive globally.

There will also be a push to encourage people to invest themselves if they can afford to. Ms Reeves said this was currently presented "in a negative light, quick to warn people of the risks without giving proper weight to the benefits".

The Chancellor said new powers to mandate pension funds to invest in UK assets were "sending a clear signal" that the Government and industry want to deliver higher returns for savers and more investment for the economy.

"But I am confident that I will not need to use that power because firms see the urgency and importance of this as clearly as I do," she said.

She went on: "As I look ahead, it is clear that we must do more. In too many areas, regulation still acts as a boot on the neck of businesses, choking off the enterprise and innovation that is the lifeblood of growth.

"Regulators in other sectors must take up the call I make this evening not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country."

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