The government's major initiatives to reform the city, including the launch of the UK ISA and the Pisces private market, are facing uncertainty following Prime Minister Rishi Sunak's decision to hold a snap election in July.
Over the past two years, ministers have sought major changes to city policy, but consultations on these landmark plans are now in jeopardy as the political focus shifts towards the next election.
Treasury sources confirmed that the government has already halted the long-awaited retail sale of its stake in NatWest, which was previously described as a way to revitalize UK retail investment. Chancellor Jeremy Hunt has announced plans to set up a British ISA to encourage British investors to support the stock market through tax breaks. However, the response to the consultation, which was scheduled to last until June 6, will be postponed until after the election.
Labor has not yet commented on the plans for Britain's internal security law, and it remains unclear whether the party will support the reforms if elected. A source at the Treasury Department indicated that “everything is under review.”
Other measures affected include the Whale Market, a proposed hybrid public-private exchange designed to provide private companies with better access to the UK's capital markets. The market, developed in collaboration with the London Stock Exchange, was scheduled to launch later this year. City Minister Bim Afolami highlighted the platform's ability to bridge the gap between public and private markets. However, the consultation on the plans ended on 17 April, and the Treasury has yet to publish a response. Labor has not formally supported the initiative, and the Treasury has not commented on its future.
The snap elections have disrupted the government's broader legislative agenda, forcing Parliament to enter a so-called wash period, where a limited number of bills are prioritized before being adjourned. The situation casts doubt on several key areas of the reform package, including an expected update on pension investment plans from Jeremy Hunt at the Mansion House summit in July.
While some reforms, such as changes to listing rules, will continue as planned this summer, many of the government's ambitious reform efforts in the city now hang in the balance. This uncertainty represents a potential setback for the Conservative Party's business strategy and its appeal in the eyes of investors and financial sector stakeholders.