Reeves sets out sweeping reforms to financial sector in search for growth
Ms Reeves, who also hopes for increased taxes from a growing economy to help balance her books, said the reforms unveiled in Leeds would help with 'reinvigorating the whole economy'.
The plans include measures to make it easier for first-time buyers to get on the housing ladder with increased levels of borrowing and efforts to support new financial technology – fintech – firms grow in the UK.
The Chancellor said: 'We are fundamentally reforming the regulatory system, freeing up firms to take risks and to drive growth.
'Second, we're providing certainty for banks operating in the UK, and ensuring that UK banks have the ability to compete internationally and drive economic growth.
'Third, we're doubling down on making the UK an innovation capital and the place of choice for fintechs to start up, to scale up and to list in the UK.
'Fourth, we're seizing opportunities in areas where we are already world leading, including asset management, sustainable finance and specialty insurance.
'And fifth, we are delivering prosperity by increasing the firepower of our capital markets and boosting retail investment.'
She said the 'Leeds reforms' are intended to 'really invigorate our financial services sector, but with the core purpose of therefore reinvigorating the whole economy'.
Ms Reeves said the financial services industry accounted for 9% of gross domestic product – a measure of the size of the economy – and was 'a big source of tax revenue' for the Treasury.
More mortgages will be available at more than 4.5 times a buyer's income following recent Bank of England recommendations that some lenders can offer more high loan-to-income mortgages if they choose to.
This will create up to 36,000 additional mortgages for first-time buyers over the first year, the Government said.
Britain's biggest building society – Nationwide – announced last week that it is aiming to increase its high loan-to-income lending limit.
From Wednesday, eligible first-time buyers can apply for Nationwide's Helping Hand mortgage with a £30,000 salary, down from £35,000, and joint applicants with a £50,000 combined salary – down from £55,000.
It is estimated this will support an additional 10,000 first-time buyers each year.
The changes will sit alongside the creation of a permanent mortgage guarantee scheme, delivering on a manifesto commitment, and a review of Financial Conduct Authority (FCA) lending rules that could allow prospective buyers' records of paying rent on time to be used to show they can afford mortgage repayments.
Further details of Ms Reeves' plans will be set out in her Mansion House speech in the City of London on Tuesday night.
She is expected to say: 'I welcome the recent changes the (Bank of England) Financial Policy Committee has announced to the loan-to-income limit on mortgage lending, which the PRA (Prudential Regulation Authority) and FCA are implementing immediately.
'With an instant impact for consumers, such as Nationwide offering its Helping Hand mortgage to more first-time buyers – supporting an additional 10,000 each year.'
The Chancellor is expected to add: '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.
'And I have been clear on the benefits that that will drive.
'With a ripple effect that will drive investment in all sectors of our economy and put pounds in the pockets of working people.'
Shadow chancellor Sir Mel Stride said: 'Today's speech is Rachel Reeves' attempt to distract from the chaos of the last few weeks. But the truth is clear – this Labour government is out of its depth.
'Rachel Reeves talks a big game on growth – yet under her watch, taxes are rising, businesses are struggling, and confidence is draining away.
'No amount of warm words can mask the reality that this is a government with no grip, no plan, and no idea how to run an economy.'
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The Sun
28 minutes ago
- The Sun
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The Independent
2 hours ago
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Rachel Reeves ‘could extend fuel duty freeze in autumn Budget' in cost of living boost
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Times
12 hours ago
- Times
‘First-time buyers want cheaper homes — not bigger mortgages'
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