Briefing: Growth may come with risk, as Reeves looks to regulatory reset

Brokers yesterday waded into the ongoing spat between the Treasury and the UK’s financial regulators, with an impassioned plea to chancellor Rachel Reeves coming in the form of a letter delivered on the eve of her Mansion House speech.

Reeves is planning to unveil the proposed Financial Services Growth and Competitiveness Strategy at Mansion House later today (15 July 2025).

The strategy has been eagerly awaited by those in the financial services sector as, hopefully, a clear view of the government’s direction of travel.

And Biba, representing its broker members, has used the opportunity to issue an open letter to Reeves calling for more proportionate regulation.

The broker trade body has long pushed for more appropriate rules to govern insurance intermediaries, even as the FCA introduced new rules to protect consumers, such as with Consumer Duty.

It even showed, via recently published research, that the costs of regulation were adding over 5% to customers’ premiums.

Regulation and its impact has been high on the agenda for the current government, which has been keen to convince the FCA and PRA that less unnecessary red tape will stimulate growth.

With the latest economic figures for the UK pointing to a shrinking economy, the City has braced for Reeves to redouble the call for a lighter touch, intended to allow businesses to take risks and encourage growth.

But if that growth comes with its own risks, the issue of how much the government is willing to accept becomes paramount.

Well regulated

Promoting growth by slashing regulation is an issue on which Biba aligns with Whitehall.

In its open letter to Reeves, it said access to the right insurance was critical to ensure a well-functioning and growing economy. 

However, it added that it was increasingly hard for individuals and businesses to access the advice and products they needed, because of the difficulties caused by overburdensome regulation on insurance brokers.

Graeme Trudgill, Biba chief executive, explained: “When you unveil your Financial Services Growth and Competitiveness Strategy at Mansion House, Biba is calling on you to put this into reverse and help put the economy on the right track.

“The insurance broking sector is a £100bn British success story supporting jobs across the economy and directly employing more than 100,000 people.“

In November last year, at her only previous Mansion House speech, Reeves hinted at what she was looking for.

She said the first ever Financial Services Growth and Competitiveness Strategy was aimed at giving the financial services sector the confidence it needed to invest and grow.

The strategy will focus on five priority growth areas, which are fintech, sustainable finance, asset management and wholesale services, insurance and reinsurance and capital markets.

By promoting these areas, the government is aiming to remove barriers to growth and investment, ensuring that the UK remains a global leader in financial services.

Biba said: “At the heart of a functioning market is strong, pro-market regulation with the interests of the consumer at the centre. Good, proportionate regulation is vital for consumer protection, encourages investment and gives customers peace of mind through Financial Conduct Authority (FCA) regulated firms, access to the Financial Ombudsman Service for complaints and to the Financial Services Compensation Scheme if a firm fails.”

It will be interesting to see just how much risk the government will be happy to allow in order to meet growth targets – and the challenges this approach may pose to the industry.