The King's Speech, expected in the coming weeks, will be a critical test of the UK government's commitment to economic growth, according to Miles Celic, chief executive of TheCityUK. He argues that including a Financial Services Bill in the speech is essential to demonstrate legislative intent and support for the financial sector, which contributes over 10% of UK economic output and employs nearly 2.5 million people nationwide.
Financial Services: A National Success Story Stalled
Celic emphasizes that financial and related professional services are not just a London issue but a national success story, generating the UK's largest net export surplus and supporting local economies across the country. However, growth in the industry has stalled over the past decade, with output flatlining while other global financial centers have reformed and legislated to simplify regulations, drive innovation, and attract capital and talent. The UK's progress has been insufficient in speed, scale, and ambition, as highlighted in TheCityUK's recent report with PwC, 'No time to lose.'
Why Primary Legislation Is Needed
Incremental reform alone will not address structural issues. Celic points to two key areas requiring primary legislation:
- Redress: The Financial Ombudsman Service needs clearer statutory footing to reduce unpredictability that harms consumers and firms while maintaining high protection standards.
- Accountability: The Senior Managers and Certification Regime (SM&CR) has become complex, duplicative, and a barrier to attracting senior talent. Legislative change is needed to reduce burden, as outlined in the government's recent SM&CR reform package.
Broader reforms should include reducing regulatory cost and complexity, removing duplicative requirements, embedding proportionality, and streamlining supervisory data requests. Celic warns that other financial centers are acting with urgency, and the UK cannot rely on historic strengths alone.
The Prize for Reform
The 'No time to lose' report estimates that reforming at speed and with decisiveness could deliver an additional £53 billion in annual economic output by 2035, equivalent to adding a city the size of Edinburgh and Glasgow combined each year. This would stimulate growth and support financial resilience for individuals and households nationwide.
Legislation Provides Certainty
Celic stresses that a Financial Services Bill is not about lowering standards or deregulation by stealth. The UK's reputation for rigorous regulation, trusted institutions, and the rule of law remains a key asset. A simpler system that reduces compliance burdens while maintaining robust risk management will make the UK more attractive for investment and innovation. Legislation provides certainty, encouraging businesses to invest. A Bill announced in the King's Speech would signal that reforms are part of a coherent long-term strategy to keep the UK a leading global financial centre.
The King's Speech will set the tone for the parliamentary session and the UK's economic ambition. Growth requires clear choices, timely action, and credible delivery. Including a targeted Financial Services Bill would demonstrate that the government shares the industry's sense of urgency and opportunity.
