Jeremy Hunt accused of leading the “race to the bottom” for banking reforms

British Chancellor of the Exchequer Jeremy Hunt.

British Chancellor of the Exchequer Jeremy Hunt.

Jeremy Hunt has been accused of leading a ‘race to the bottom’ on banking standards after unveiling plans to get rid of regulations brought in after the financial crash.

The chancellor has unveiled a number of changes to the financial sector which he says will take advantage of the UK’s “Brexit freedoms” to overhaul banking rules.

The package contains more than 30 regulatory reforms which Hunt says will “boost” growth in cities and towns across the UK.

They will essentially ease banking rules introduced after the 2008 financial crash, which saw the UK banking system on the verge of collapse.

However, opposition MPs have accused the government of raising taxes for households by boosting bonuses for bankers.

“It’s completely jarring that this government is raising taxes for hard-working families, cutting taxes and increasing bonuses for banks,” said Lib Dem MP Sarah Olney.

The Richmond Park MP said financial services needed “smart regulation” and not a “race to the bottom.”

Shadow city Labor minister Tulip Siddiq also described it as a “race to the bottom” and added: “Introducing more risk and potentially more financial instability because you can’t control your backbenchers is this Tory government all over the place.

“That this is after the Tories crashed our economy is beyond misleading.”

The City of London has seen trade with the EU impacted by Brexit, with Amsterdam overtaking London as Europe’s largest trading center last year.

Hunt said: “We are committed to securing the UK’s status as one of the most open, dynamic and competitive financial services hubs in the world.

“Edinburgh’s reforms seize our Brexit-related freedoms to deliver a nimble, local regulatory regime that works in the interests of the British people and our businesses.

“And we will go further by making reforms to burdensome EU laws that stifle growth in other sectors such as digital technology and life sciences.”

City of London Corporation policy chairman Chris Hayward said major reform of the UK’s financial sector was something to be “excited about”.

He denied that the move represents a regulatory “race to the bottom” and told BBC Radio 4’s Today programme: “It’s not about deregulation, it’s about growth.

“We need the help of good growth and good regulation at the same time, they are two sides of the same coin.”

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