RACHEL Reeves is set to draw inspiration from Margaret Thatcher as she prepares to unleash a bonfire of banking rules in a desperate bid to spark economic growth today.
The Chancellor will unveil what the Treasury has hailed as the biggest set of financial regulation reforms when she delivers a speech to City grandees at Mansion House this evening.
She will say: “Today, I have placed financial services at the heart of the government’s growth mission.
“Recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving.”
The Treasury said that the so-called Leeds Reforms will address the long-standing complaints of City fat cats by slashing red tape on financial firms, and Reeves will insist that unleashing capital will trickle down to “working people”.
It comes after The Sun on Sunday reported that she will urge bankers to stay in London rather than moving to New York or Paris.
Post-Brexit London has seen an exodus of financial services workers, with consultancy firm EY finding that more than 7000 jobs had moved from the UK to the EU in 2022.
A Treasury source told The Sun on Sunday: “Millions of Brits work in financial services, but for too long red tape and excessive regulation has choked off innovation and growth in the economy.
“Well, no more. Britain is entering a new era. We will slash regulation and make the UK the best place in the world to do business.
“Forget Paris, New York and Frankfurt – come to London, Leeds and Edinburgh.
“Rachel is determined to create a new Big Bang which will turbocharge growth in the economy for a new generation to put more pounds in people’s pockets.”
Dave Doogan, the SNP's economy spokesperson, told The National there was "no bounds" to Labour's desire to invite comparisons with Thatcher, after Keir Starmer claimed the controversial former PM had "set loose our natural entrepreneurialism".
But Doogan (below) added: "It goes down like a bucket of cold sick in Scotland where communities still suffer from the economic misery she inflicted upon our country.
"While Rachel Reeves may hark back to a golden age for London-based bankers, the fact is at the very time Thatcher rewarded the City, Scotland's heavy industries were being systemically destroyed while our North Sea oil kept the UK state afloat.
"Sir Keir Starmer and Rachel Reeves might see Margaret Thatcher as an idol to emulate, but to increasing numbers of Scots that simply serves to show just how distant Westminster is to the needs of Scotland.
"The Labour Party may plan to cut regulation for London bankers, but the biggest piece of red tape they can cut is Brexit which the Westminster establishment refuse to acknowledge – Scotland is a wealthy country blessed with natural resources, but for as long as we remain tied to broken, Brexit Britain our full potential will never be realised."
Greens co-leader Lorna Slater added: "Has Rachel Reeves learnt nothing from the 2008 financial crash? Setting these London bankers up to do anything in their power for their own profit will be a disaster for the people of Scotland.
"Labour claims to be doing this to ‘turbocharge growth’, but working-class families won’t feel any growth; it’s the bankers and London elite that will profit from these changes. In recent years, we’ve seen the ultra-wealthy pocket more and more, whilst the cost-of-living crisis has forced many families into poverty."
The Chancellor is under immense pressure after her failure to turn around the flagging UK economy.
Growth fell in May for the second month running and the Office for Budget Responsibility last week set out a bleak picture of the public finances.
She will tell City grandees on Tuesday that bankers can be assured of “higher wages and higher living standards”, The Guardian reports.
Elsewhere, the Bank of England is likely to cut interest rates, in news that will be welcome for people with mortgages, but only if there the Government’s National Insurance hike continues to prevent firms from hiring new workers and making redundancies.
Governor Andrew Bailey told The Times there was “consistent” evidence of businesses “adjusting employment” because of Labour’s jobs tax, adding that he believed “path is downward” for interest rates, which currently stand at 4.25%.
