Labour Party’s Promise of ‘National Renewal’ Sparks Optimism in City of London


The Labour party’s sweeping victory on Friday and its promise of a programme of “national renewal” has generated optimism among City of London executives, who are hopeful for a prolonged period of political stability.

Corporate leaders have called for “bold” actions to enhance the UK’s capital markets, but their primary desire is for predictability following years of disruption caused by Brexit, the pandemic, Liz Truss’s 2022 “mini” Budget, and frequent changes in political leadership.

“We hope this government will usher in a new era of policy certainty, stability, and predictability — one that the UK urgently needs to boost investment, drive growth, and bolster its international competitiveness,” said Miles Celic, chief executive of TheCityUK, a financial services lobby group.

Bruce Carnegie-Brown, chair of the Lloyd’s of London insurance market, echoed this sentiment, calling for the new government to “bring a period of greater stability and to enact reforms necessary to improve the economy’s competitiveness.”

The Labour party has established strong connections in the City over recent years, and businesses are keen for this relationship to continue, especially as the party considers regulatory changes.

“The government has a clear mandate to lead — which is good for stability and getting things done,” said Marco Amitrano, senior partner of PwC UK. However, he emphasized the need for a “healthy dialogue” with companies to avoid unintended consequences from significant measures.

NatWest chief executive Paul Thwaite and Lloyds Banking Group boss Charlie Nunn welcomed Labour’s commitment to prioritizing economic growth.

Regulation & Competitiveness

The City is closely watching Labour’s approach to regulation. The financial services industry, which felt constrained under Rishi Sunak’s Conservative government, is eager to see a different approach to risk management.

Executives have expressed frustration over current regulatory practices, particularly with the Financial Conduct Authority’s plans to publicly identify companies under investigation before any wrongdoing is confirmed.

Peter Horrell, UK chair of Fidelity International, highlighted that the pension and savings market has become overly focused on avoiding risks, which he believes is detrimental to individual investors’ long-term growth opportunities.

Labour has promised to create a regulatory innovation office to “improve accountability and promote innovation in regulation,” but details on its practical implementation are still pending.

Capital Markets Reform

Jeremy Hunt’s unfinished overhaul of UK capital markets rules, including the Edinburgh and Mansion House reforms, leaves room for Labour to make significant changes. Wealth managers and fund groups urge Labour to make domestic equities more attractive to revive investor interest in the UK stock market.

“We need a government that is going to be bold and imaginative” to address the UK’s capital markets “malaise,” said Matthew Beesley, chief executive of Jupiter Fund Management.

Calls continue for pension funds to invest more in UK companies and for the reduction or abolition of the 0.5% stamp duty on trading UK-listed shares, which raises approximately £3.8bn annually for HM Treasury.

Barclays CEO CS Venkatakrishnan emphasized the importance of fostering a culture of informed equity risk-taking to grow the UK’s next generation of technology companies and reinvigorate public markets.

Pensions and Insurance

The UK’s pensions and insurance industries, managing trillions of pounds, will be crucial in any capital markets overhaul. Labour has pledged to review the UK pensions landscape and may push industries to invest more in British assets.

Hendrik du Toit, CEO of asset manager Ninety One, criticized the decline of the UK equity market due to pension funds’ risk-averse strategies. He suggested a review of regulations to nurture the wealth management industry.

Labour’s plans include making it easier for pension funds to invest in unlisted assets, such as infrastructure projects, to boost the economy and pension-holders’ returns. The party also aims to create a national wealth fund to attract private capital into decarbonization projects.


Labour’s promise to publish a “road map” for business taxation has been welcomed by business groups for the certainty it offers. However, concerns exist over a planned crackdown on a tax “loophole” used by private equity executives, which could raise £565 million annually by taxing “carried interest” as income rather than capital gains.

The industry is also cautious about Labour’s intent to tighten rules on “non-doms” and the possibility of increasing the capital gains tax rate, potentially prompting wealthy individuals to sell assets or leave the country.

The Labour party’s next steps in these areas will be closely monitored by the financial services sector, which hopes for policies that will enhance the UK’s economic stability and growth.