Financial services policies in UK general election manifestos

Out-Law Guide | 28 Nov 2019 | 10:59 am | 4 min. read

From taxation to regulation to investment and climate change, the main UK parties' policies financial services express their wider priorities.

You can also see what the parties say about infrastructure; manufacturing and technology; energy; retail, and real estate in our companion guides.

Conservative

The Conservative Party manifesto says that financial services, alongside law and tech will continue to be world leading sectors after Brexit, however there are few references to financial services in the document beyond this. The Financial Services commitments include plans to:

  • strengthen the UK’s corporate governance regime and reform insolvency rules and the audit regime so that customers and suppliers are better protected when firms go into administration;
  • introduce legislation that protects pension pots from beingmisused by irresponsible employers, introduces a pensions dashboard and creates a new style pension scheme;
  • maintain corporation tax at 19%;
  • introduce a start-up visa to ensure that the UK can attract the entrepreneurs of the future.

Labour

The most eye catching proposal from Labour on financial services is its commitment to changing the criteria a company must meet in order to be listed on the London Stock Exchange, so that any company that fails to contribute to tackling the climate and environmental emergency is delisted.

Labour's financial services commitments include plans to:

  • improve the fitness of the UK's financial authorities to mobilise green investment by giving them powers to manage the risk to financial stability posed by short-sighted investment in polluting assets;
  • create a publicly owned Post Bank that will be run through the Post Office network and renationalise the Royal Mail back into public ownership

SNP

The regulation of financial services is reserved to Westminster so the SNP has adopted an approach of 'campaigning' for change on issues. Financial services commitments include plans to: 

  • campaign against bank, ATM and post office closures and demand the UK Government and big banks guarantee communities’ access to cash;
  • support moves suggested by the Treasury Committee to force big banks to pay more to the Post Office when they leave it as the last place in town to do basic banking;
  • call for a strategic review of support provided to the Post Office and support increases in the remuneration given to sub postmasters.

Liberal Democrat

The Liberal Democrat Party says that it will work with 'major banks' to fund the creation of a local banking sector which will support the needs of local small and medium-sized businesses and underpin the party's plans for devolution and regional growth.

Beyond this the party has committed to regulating financial services to encourage green investments. It says that this will include requiring pension funds and managers to show that their portfolio investments are consistent with the Paris Climate Change Agreement, as well as creating new powers for regulators to act if banks and other investors are not managing climate risks properly. Financial services commitments include plans to:

  • protect the independence of the Bank of England and retain the inflation target of 2%;
  • ban the use of credit cards for gambling;
  • expand the British Business Bank to perform a more central role in the economy, to ensure that viable small and medium-sized businesses have access to capital, even when the rest of the commercial banking system can’t provide it;
  • introduce a general duty of care for the environment and human rights – requiring companies, financial institutions and public sector agencies to exercise due diligence in avoiding specified activities such as child labour or modern slavery, or specified products such as commodities produced with deforestation, in their operations and supply chains, and to report on their actions;
  • reform fiduciary duty and company purpose rules to ensure that all large companies have a formal statement of corporate purpose, including considerations such as employee welfare; environmental standards; community benefit and ethical practice; alongside benefit to shareholders, and that they report formally on the wider impact of the business on society and the environment;
  • encourage new forms of incorporation and a diversity of business types, such as for large firms contracting with the public sector or providing essential utilities and for smaller firms wanting a dual purpose to be profit-making and have a positive impact on society, workers, communities and the environment;
  • require binding and public votes of shareholders on executive pay policies;
  • extend the scope of the existing ‘public interest’ test when considering approvals for takeovers of large or strategically significant companies by overseas-based owners to recognise the benefits to the UK economy, workers and consumers of protecting UK companies from speculative or short-term interests;
  • encourage employers to promote employee ownership by giving staff in listed companies with more than 250 employees a right to request shares, to be held in trust for the benefit of employees;
  • strengthen worker participation in decision-making, including staff representation on remuneration committees, and require all UK-listed companies and all private companies with more than 250 employees to have at least one employee representative on their boards with the same legal duties and responsibilities as other directors;
  • restore corporation tax to 20% and ensure the rate is stable with a predictable future path;
  • simplify business taxation to lower administration costs, supporting smaller companies, and reduce opportunities for tax avoidance;
  • replace business rates in England with a Commercial Landowner Levy based solely on the land value of commercial sites rather than their entire capital value, thereby stimulating investment, and shifting the burden of taxation from tenants to landowners;
  • take action against corporate tax evasion and avoidance by:
  • introducing a General Anti-Avoidance Rule, setting a target for HM Revenue and Customs to reduce the tax gap and investing in more staff to enable them to meet it;
  • reforming place of establishment rules;
  • improving the Digital Sales Tax;
  • support and build on the OECD’s proposals to require multinationals to pay a level of tax which is more closely related to their sales in every country in which they operate.