Chancellor Rachel Reeves has indicated a willingness to roll back certain financial regulations imposed after the 2008 banking crisis in an effort to stimulate economic growth in the UK. Speaking during a panel debate at the International Monetary Fund conference in Washington DC on Thursday, Reeves suggested that regulatory measures introduced in the aftermath of the financial crash may now be impeding competition and raising costs for consumers.
“Excessive regulation makes it hard for new entrants to come into market, puts up prices for consumers,” Reeves stated. She acknowledged the necessity of stricter rules following the crisis but argued that nearly two decades on, the balance between oversight and growth needs reconsideration. “We are now what you know, getting on for 20 years since the financial crisis. And I do think we've got to think about that balance,” she said.
The 2008 crisis saw major UK financial institutions, including Lloyds, Halifax Bank of Scotland, and the Royal Bank of Scotland, collapse or require government takeovers, with the then Labour government under Gordon Brown nationalising Northern Rock. The episode prompted a wave of new regulations domestically and internationally aimed at preventing a recurrence of systemic risk and economic instability, which led to bailouts of entire economies such as Greece and Ireland.
Reeves, who has headed the Treasury since Labour regained power last July, is navigating an economy described as flatlining and bordering on recession. Her comments suggest a potential shift toward easing rules to revitalize the City of London and broader financial markets, though she has yet to outline specific policy changes in this area.
In addition to financial regulations, Reeves expanded her critique to include environmental regulations, which she described as significantly hampering infrastructure and renewable energy projects in the UK. Highlighting examples such as delays in building pylons and wind farms, she criticised protections linked to species like sea bream and certain spiders, as well as costly measures implemented to safeguard bats along the High-Speed 2 (HS2) rail link.
She remarked: “Environmental regulations are now the biggest barrier to investing in renewable energy in the UK. That is not the purpose of environmental regulations, but they're the things that are holding up pylons being built.” Reeves emphasised the practical impact this has on critical projects, including housing developments and energy infrastructure, suggesting reform is necessary to facilitate national growth priorities.
These remarks come amid the Chancellor’s broader efforts to stimulate investment and economic activity at a time of uncertainty, with a focus both on recalibrating financial sector oversight and streamlining regulatory frameworks that affect multiple sectors. The Independent reports that Reeves has connected her views on financial and environmental regulation to Labour’s wider vision for infrastructure investment and economic revival.
Source: Noah Wire Services