Labours new plan for financial services

The Labour Party is launching a number of policy papers and reports in the run-up to the General Election. Will Labour’s new plan for financial services affect you?

At Wednesday’s Business Conference, the party unveiled a new report entitled Financing Growth: Labour’s Plan for Financial Services. Here’s a snapshot of the main points.

Green mortgages:

  • Labour will support expanding the offering of green mortgages, which may be less expensive than other mortgages.
  • This could include Providing access to green mortgages to homeowners who complete retrofitting work on their homes to improve energy efficiency.
  • Including financing for energy efficiency retrofitting works within green mortgage offers for new homeowners.
  • Labour will explore the potential for introducing property-linked financing, following the model of the US Property Assessed Clean Energy programme.
  • Labour plans to work with banks and industry to expand green mortgages, which fund energy efficiency improvements to homes. This is intended to help support the decarbonisation of the UK’s housing stock.

 Financial resilience

  • Labour will work with industry and consumer groups to explore ways to support people in increasing their financial resilience.
  • Labour will partner with the financial services sector to encourage increased offering of longer-term fixed-rate mortgages, giving people more choice over interest rate risk. This could also help more first-time buyers access mortgages.
  • Labour will work with the sector to pilot innovative solutions, such as NEST Insights’ workplace savings programme, to encourage savings.
  • These key policies aim to provide people with more mortgage choices, pilot workplace savings schemes, and identify barriers to offering programs that help consumers improve financial resilience.

Read about the new NS&I Green Savings Bond

 Pensions:

  • Labour will undertake an in-government review of the pensions and retirement savings landscape to evaluate if the current system will deliver sustainable retirement incomes.
  • This will involve working with industry to identify barriers to pension schemes investing more in UK assets.
  • To enable greater consolidation across pension schemes, Labour will give The Pensions Regulator (TPR) new powers to bring about consolidation where schemes fail to offer sufficient value and ask the TPR to guide on fund and strategy suitability.
  • Labour will establish a British ‘Tibi’ scheme, modelled after the French scheme, for defined contribution pension funds to invest a proportion of assets into UK growth assets like venture capital, small-cap growth equity, and infrastructure.

Consumer protection:

  • Labour will adopt a joined-up approach to fraud across government, law enforcement, regulators, financial services firms and tech companies to address the entire fraud ecosystem.
  • Labour will support payment service providers’ having the flexibility to delay suspicious payments while ensuring appropriate dispute resolution processes are in place for customers if payments are mistakenly delayed.
  • Labour will regulate the Buy Now Pay Later (BNPL) sector to protect consumers better, providing certainty for providers.
  • Labour will explore alternative models for increasing financial resilience, including encouraging longer-term fixed-rate mortgages and innovative savings programmes.
  • In summary, the key consumer protection policies aim to tackle fraud, provide flexibility to delay suspicious transactions, regulate BNPL, increase financial resilience options, and improve access to affordable financial guidance.

There are many implications for financial services consumers, and we will continue to keep you informed with more detail over the coming weeks and months.