MPs Slam Chancellor’s Reforms for Lacking Substance and Impact

Promised reforms to the UK’s financial services sector have been dismissed as a “damp squib” by an influential group of MPs, who argue that much of what was promised by Chancellor Jeremy Hunt has failed to materialise. The Treasury Committee, in its analysis, found that despite claims of progress, several of the supposed reforms lack substance or have yet to be fully implemented.

The Chancellor had claimed that 21 out of 31 reforms he outlined last year had been completed, but the committee pointed out that six of these were not truly finished, and another six were essentially nothing more than actions like publishing documents or initiating consultations — which, according to MPs, are not genuine reforms.

Harriett Baldwin, MP and chair of the Treasury Committee, expressed disappointment, stating, “The Edinburgh reforms were given considerable fanfare last December but, 12 months on, the lack of progress or economic impact has left them feeling like a damp squib.”

The reforms, which were introduced by Hunt in December as part of a broader effort to modernise financial services regulation, included changes to short selling disclosures, adjustments to regulatory oversight, the removal of certain EU rules, and tax reforms. While these measures were welcomed by some as sensible and logical, the committee questioned whether publishing documents and launching reviews should be considered real reforms.

“More than a decade after the financial crash and six years after the UK voted to leave the European Union, the Treasury was absolutely right to look at updating regulation of the financial services sector,” Baldwin added. “However, the lack of tangible progress raises concerns about the actual effectiveness of these so-called reforms.”

In response, Economic Secretary to the Treasury, Bim Afolami, defended the reforms, claiming that they were pivotal to creating a more innovative and robust financial environment. He said, “My number one priority in this role is to deliver on the Edinburgh reforms. Over the past year, we’ve made significant strides towards fostering an economic landscape that supports growth and the well-being of savers.”

Despite the Government’s claims of delivering 22 out of 31 reforms, the Treasury Committee’s assessment casts doubt on the scale of the actual changes and their potential impact on the UK’s financial sector.