Reeves unveils City strategy aimed at cutting red tape and fuelling UK growth
Rachel Reeves has unveiled a package of City changes meant to cut “unnecessary” red tape and encourage more financial risk-taking by companies and consumers in the hopes of spurring economic growth.In a financial services strategy dubbed the Leeds Reforms, the chancellor outlined initiatives designed to boost the financial services sector, including plans to cut “unnecessary costs” related to accountability rules for senior bankers, and to launch an advertising campaign to get consumers investing cash savings in stocks.The UK government will review ringfencing rules – introduced after the 2008 financial crisis – that are meant to protect consumer cash from a bank’s riskier business activities.The independence of the Financial Ombudsman Service, which settles complaints between consumers and businesses, will also be watered down, while the rate of interest – and total compensation – that banks and other City firms have to pay to wronged consumers will be reduced.There will also be a review of risk warnings attached to investment products to ensure that people are “accurately” judging risk levels.
• Looser mortgage rules, which allow lenders to provide bigger mortgages worth more than 4.5 times borrowers' annual income.The move could help another 36,000 first-time buyers per year, according to the Bank of England• A permanent government-backed mortgage guarantee scheme, in which taxpayers will pick up the bill when a borrower defaults, in an effort to encourage participating banks to offer more 91-95% mortgages • A government-backed but industry-funded advertising campaign to encourage consumers to invest their cash savings in shares • Plans to allow banks to send information about “investment opportunities” to savers that have cash sitting in low interest rate accounts, encouraging them to shift money to stocks and shares• A fresh review of ringfencing rules which were introduced after the 2008 financial crisis in order to protect consumer cash from a bank’s riskier activities • A review of warnings attached to investment products to ensure that people are “accurately” judging risk levels• Plans to “radically streamline” accountability rules for senior bankers and finance bosses• Reining in the powers of the Financial Ombudsman Service, which settles complaints between consumers and businesses• Cutting the rate of interest – and therefore total compensation – paid out to consumers wronged by City firms and imposing a 10-year limit for claims• A new “concierge service” to court international investors and create a one-stop-shop to promote the UK and provide tailored support to help businesses plan where to invest.The measures were announced ahead of Reeves’s Mansion House speech, where she will address the most senior bosses from across the financial services sector at a dinner at the Guildhall in London on Tuesday night.The chancellor is under pressure after official figures last week showed the economy shrank by 0.
1% in May, and she is widely expected to have to raise taxes again in the autumn budget.Business groups have blamed Reeves’s £25bn increase in employer national insurance contributions, which came into force in April, for weighing on growth, while Donald Trump’s trade war has sapped confidence.Reeves said in a statement on Tuesday morning: “We fixed the public finances and stabilised the economy.Now we need to double down on our global strengths to put the UK ahead in the global race for financial businesses, creating good, skilled jobs in every part of the country and helping savers’ money go further through our plan for change.”The Leeds Reforms were revealed during a summit with City bosses in West Yorkshire, including the Lloyds Banking Group chief executive, Charlie Nunn.
Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionThe bosses of City regulators, who have been under pressure to cut regulatory burdens on UK firms, were also in attendance, including the Financial Conduct Authority’s chief executive, Nikhil Rathi, and the head of the Bank of England’s Prudential Regulation Authority, Sam Woods.The Treasury said the package of measures would ultimately “tear down the barriers” to investment while “reintroducing informed risk-taking into the system, cutting unnecessary red tape, driving more finance into public markets and actively helping international companies to set up in the UK”.Together, the measures are intended to make the UK the “number one” hub for financial services firms by 2035, with the Labour government saying it will help attract inward investment.
An AI-generated band got 1m plays on Spotify. Now music insiders say listeners should be warned
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Scientists reportedly hiding AI text prompts in academic papers to receive positive peer reviews
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Fathers plan legal action to get smartphones banned in England’s schools
Two fathers plan to take legal action against the government in an attempt to get smartphones banned in schools in England.Will Orr-Ewing and Pete Montgomery wrote to the education secretary, Bridget Phillipson, on Friday warning that they would seek a judicial review. They argue that current guidance, which allows headteachers to decide how smartphones are used, is unlawful and unsafe for children.The Department for Education now has 14 days to officially respond to the letter, after which point the claimants can issue judicial review proceedings.The DfE said schools already had the power to ban phones and it was bringing in “better protections” from harmful content through the Online Safety Act
Brenda, 95, and her soft toys become unlikely stars on TikTok
The anger and polarisation often on display on social media have made it a stressful place to venture for many people, wary of its unpredictable pile-ons and bile-filled responses. Yet a 95-year-old Cheshire woman and her soft toy collection have become the unlikely stars of a trend to encourage kindness in the comments.Brenda Allen said she had been flabbergasted by the response to her recent TikTok videos, in which she talks about her quirky Jellycat figures. Encouraged by a staff member at her care home, she began by showing viewers a hat-wearing avocado named Florence. Her haul also features a cuddly pot plant and a squashy, smiling pain au chocolat
Ofcom head says age checks are ‘really big moment’ for children’s online safety
The UK’s chief media regulator has promised age verification checks will prove a “really big moment” in the battle to keep children safe online, even as campaigners warn she needs to take tougher action against big technology companies.Melanie Dawes, the head of Ofcom, said on Sunday that the new checks, which have to be in place later this month, would prove a turning point in regulating the behaviour of the world’s biggest online platforms.But she is coming under pressure from campaigners – many of them bereaved parents who say social media played a role in their children’s deaths – who say the new rules will still allow young people to access harmful material.Dawes told the BBC on Sunday: “It is a really big moment, because finally, the laws are coming into force.“What happens at the end of this month is that we see the wider protections for children come online
Teach First job applicants will get in-person interviews after more apply using AI
One of the UK’s biggest recruiters is accelerating a plan to switch towards more frequent face-to-face assessments as university graduates become increasingly reliant on using artificial intelligence to apply for jobs.Teach First, a charity which fast-tracks graduates into teaching jobs, said it planned to bring forward a move away from predominantly written assignments – where AI could give applicants hidden help – to setting more assessments where candidates carry out tasks such as giving “micro lessons” to assessors.The move comes as the number of people using AI for job applications has risen from 38% last year, to 50% this year, according to a study by the graduate employment specialist Bright Network.Patrick Dempsey, the executive director for programme talent at Teach First, said there had been a near-30% increase in applications so far this year on the same period last year, with AI playing a significant role.Dempsey said the surge in demand for jobs was partly due to a softening in the labour market, but the use of automation for applications was allowing graduates to more easily apply for multiple jobs simultaneously
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