Politics

Labour Just Promised a Big Bang for Bankers and It’s Sparked a Political Firestorm

Published on July 15, 2025

Rachel Reeves is gearing up for a major announcement in her Mansion House speech this week, with plans to rip up regulations in a bold move she hopes will trigger an economic boom. It’s being likened to Thatcher’s Big Bang shake-up of the City in the 1980s, and that comparison alone has already ruffled plenty of feathers.

According to The Sun on Sunday, Reeves wants to turn post-Brexit Britain into a financial powerhouse again and is urging bank bosses to keep their staff in places like London, Leeds and Edinburgh instead of shipping them off to New York or Paris. That plea comes in the wake of a worrying trend, with more than 7,000 jobs having already moved from the UK to the EU by 2022, according to EY.

A Treasury insider told the paper, “Millions of Brits work in financial services, but for too long red tape and excessive regulation has choked off innovation and growth in the economy.” They added, “Forget Paris, New York and Frankfurt – come to London, Leeds and Edinburgh.”

The Chancellor’s plan? Spark a “new Big Bang” to breathe life back into the economy and, as she hopes, “put more pounds in people’s pockets”.

Not everyone’s buying the hype though. The SNP have lashed out, with economy spokesperson Dave Doogan accusing Labour of romanticising Thatcherism. He said there’s “no bounds” to how far the party will go in drawing parallels with the former PM, after Keir Starmer recently praised Thatcher for unleashing “entrepreneurialism”.

Doogan wasn’t pulling punches: “It goes down like a bucket of cold sick in Scotland where communities still suffer from the economic misery she inflicted upon our country.”

He pointed out the contrast between Thatcher’s rewards for the City and the devastating impact her policies had on Scotland’s heavy industries. “Sir Keir Starmer and Rachel Reeves might see Margaret Thatcher as an idol to emulate, but to increasing numbers of Scots that simply serves to show just how distant Westminster is to the needs of Scotland.”

He also argued that the real red tape Labour should be cutting is Brexit, not financial regulation. “Scotland is a wealthy country blessed with natural resources, but for as long as we remain tied to broken, Brexit Britain our full potential will never be realised.”

The Greens weren’t far behind in their criticism either. Lorna Slater accused Reeves of forgetting the lessons of the 2008 crash, saying “setting these London bankers up to do anything in their power for their own profit will be a disaster for the people of Scotland.”

She added, “Labour claims to be doing this to ‘turbocharge growth’, but working-class families won’t feel any growth; it’s the bankers and London elite that will profit from these changes.”

Reeves is facing serious pressure as the UK economy continues to stall. Growth slipped again in May for the second straight month, and the Office for Budget Responsibility has painted a bleak picture of the public finances.

She’ll be trying to reassure the City this week, with The Guardian reporting that she’s expected to promise bankers “higher wages and higher living standards”.

Meanwhile, there’s talk that the Bank of England could finally start cutting interest rates – some rare good news for homeowners. But any relief might be short-lived if businesses keep cutting jobs, with Bank Governor Andrew Bailey blaming Labour’s National Insurance hike for firms “adjusting employment”. He did, however, hint that the trend for rates was “downward”, currently sitting at 4.25%.

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