Healey rallies behind financial services bill despite opposition

John Healey has expressed support for the government's financial services bill, which allows the City to capitalize on post-Brexit freedoms, despite opposition from consumer groups. The chancellor claimed the bill would establish a "clear set of standards" and eliminate "confusion and inconsistency" for consumers. The legislation sets a 10-year time limit for complaints to the Financial Ombudsman Service and introduces a new test where firms that demonstrate compliance with watchdog rules will be presumed to have acted fairly, regardless of the customer's perception of a poor outcome.

The new system requires cases to be referred to the Financial Conduct Authority in instances of ambiguity. However, consumer advocates such as Fairer Finance, Which?, and Martin Lewis's Money Saving Expert contend that the bill could lead to consumers being excluded from free, independent redress due to changes in the legislation.

Treasury committee chair Meg Hillier argued that the bill "moves the pendulum more towards the financial services sector and further from regulation to support consumers." Healey refuted this assertion, stating that the bill does not imply "the firm is always right." The City has hailed the move in the King's Speech as a means to capitalize on Brexit's regulatory advantages, as it allows London's financial hub to break away from restrictive Brussels-era directives and burdensome capital rules.

Prime Minister Andy Burnham has called for closer ties with the European Union, creating tension over the potential impact on the City's regulatory framework. The government seeks to maintain the City's independence in EU negotiations and prevent the 27-member bloc's regulations from applying to UK financial services. The bill replaces rigid EU rules on consumer loans with the ability to update cancellation and information rules rapidly in the UK's own handbook.

It also eliminates the outdated system for approving foreign financial firms, enabling the government to allow overseas companies to operate in the UK if their home rules achieve similar outcomes to UK laws.