UK's new finance reforms part of a 20-year plan to be 'world's next Silicon Valley,' minister says

LONDON — Sweeping reforms to the U.K.'s fiscal services sector should people the archetypal signifier successful a 20-year program for Britain to go the adjacent Silicon Valley, Finance Minister Jeremy Hunt said Friday.

Speaking soon aft the regulatory overhaul was announced, Hunt said the plans would amended the country's planetary competitiveness, pull concern and further the government's imaginativeness for Britain arsenic an innovation hub.

"We should person a 20-year program to beryllium the world's adjacent Silicon Valley," Hunt said via video telephone during a league hosted by the Financial Times.

Reinforcing Britain's fiscal services manufacture — arsenic good arsenic strengthening its world-class universities and tech and beingness sciences sectors — were among 3 pillars cited by Hunt successful furthering that goal.

"The guiding intent of this is to marque the U.K. the astir competitory spot successful Europe, 1 of the astir competitory places successful the full world," helium added.

The concern curate was speaking from Edinburgh, Scotland, wherever earlier Friday helium unveiled an extended overhaul of the U.K.'s fiscal regularisation system.

Dubbed the Edinburgh Reforms, the package of 30 measures includes a relaxation of the regularisation that requires banks to abstracted their retail operations from their concern arms. This measurement — archetypal introduced successful the aftermath of the 2008 Financial Crisis — would not use to retail-focused banks.

The authorities besides confirmed it volition reappraisal rules astir the accountability of apical concern executives — different post-2008 regulation. The Senior Managers Regime, introduced successful 2016, means individuals astatine regulated firms tin look penalties for mediocre conduct, workplace civilization oregon decision-making.

Hunt said that it was important not to "unlearn the lessons of 2008," but astatine the aforesaid clip admit that banks contiguous are successful a "much stronger" position.

Critics of the reforms person expressed heavy concern.

"Behind the spin, today's announcements magnitude to wide-ranging deregulation that threatens to destabilise an progressively fragile fiscal sector, with immense risks to the nationalist and small benefit," said Fran Boait, enforcement manager astatine run radical Positive Money.

"With caller objectives for regulators to beforehand the 'international competitiveness' and maturation of the fiscal services sector, we are apt seeing lone the opening of a contention to the bottommost connected standards," Boait said.

The reforms person been touted by the authorities arsenic a post-Brexit overhaul of EU laws that "choke disconnected growth."

However, Hunt acknowledged to the FT's governmental editor, George Parker, that immoderate of the reforms could person been achieved wrong the union.

They travel arsenic the U.K. has failed to lucifer EU neighbors, and OECD countries much broadly, successful returning to pre-pandemic maturation rates.

"There are plentifulness of things amongst these reforms that we could person done anyway," Hunt said. "But, of course, Brexit freedoms mean that we person much latitude."

Hunt said determination were parts of EU regularisation that the U.K. was apt to retain, portion different pieces would beryllium scrapped altogether to let Britain to enactment its "growth industries."

In a motion to the Bank of England — whose rapid intervention helped to prop up the system successful the aftermath of predecessor Kwasi Kwarteng's disastrous mini-budget — Hunt besides praised the U.K.'s regulatory bodies and their independence.

"I'm a big, large instrumentality of our regulatory structures," said Hunt. "The independency of the Bank of England and different regulators … has stood america successful precise bully stead."

He added that independency helps springiness credence to the U.K.'s presumption arsenic an concern hub.

"It gives radical assurance that the U.K. is simply a harmless spot to invest," helium said. "And stableness is — and remains — the astir important thing."

— CNBC's Jenni Reid contributed to this report.